Michelle Reynolds, owner of Aggregate Supply Services, is a Florida based supplier of rock for infrastructure construction projects. Aggregate Supply was recently awarded a multi-year contract with the Army Corps of Engineers "We're a seven year old company with no debt and fair day-to-day cash flow. We're currently running seventy trucks and the Army contract will stretch our resources to cover payroll and fuel costs. We were fortunate to remain in business after the last three years and our bank was simply unable to give us the amount of additional credit we needed to support the new contract. We were devastated thinking about losing this contract due to cash flow problems. After we discussed our situation with our Accountant they referred us to Gateway Commercial Finance."
Michelle's situation is typical of contractors that survived the 2008 crash by right-sizing operations in line with revenue. "Our situation is common among our peers and thanks to our suppliers and employees, we were fortunate to win this new contract. Gateway was an ideal partner to support our weekly payroll and fuel needs and was a pleasure to work with from the initial introduction."
Smart business owners try to make sure that their companies are never too big to support, but also never too small to get the job done. Government contractors felt the pinch when the economic floor fell out from under everyone in 2008. Contract business was lost and contractors started to streamline operations to stay in business.
But the government can be an unforgiving business partner and now those streamlined government contractors are being asked to ramp back up to full speed. The problem is that getting back up to full speed requires cash and it requires ongoing funding. It is a downward spiral that can lead to disaster, unless you find the right financial solution.
Government Factoring Is A Government Contractor's Best Friend
Let's be honest and say that the government is not always a prompt paying customer. But government contractors take on the risk because they know that, at some point, they will get paid. What do you do when the government persists with its slow paying habits and then asks you to start investing significant sums of money into your business to meet new demands? You contact a company that offers invoice factoring services and allow your cash flow to keep pace with demand.
Factoring of invoices is the ideal financial solution for government contractors because it allows the contractors to see money before the invoices’ due dates. Instead of waiting and hoping that the government will pay close to its invoice payment date, your company has already received the funds and is able to keep pace with the contract funding demands.
Government Contract Funding Is Done Based On Your Client's Credit
Despite its penchant for invoice paying drama, the government still maintains a pretty high credit rating with financial institutions. You can leverage that credit power in your favor by getting involved with a government factor. With this kind of government contract funding service, the focus is on the customer and not the contractor. Government contractor factoring companies don't care what the contractor's credit score looks like; they only care about the client's. When your client is the government, that makes the decision a pretty easy one.
Let The Government Lift Your Contracting Burden
Instead of struggling under the weight of increasing contractual demands by a government agency, you can utilize government contractor factoring to lift that burden using the government's own credit power to your advantage. Your government contracting company will have the constant supply of cash it needs and you will be able to grow to meet the demands of the government agency.
The economy is starting to recover and your government contracting business needs to be able to keep pace with the new work demands. With government contractor factoring, your company will be able to have the reliable contract funding it needs to invest in new equipment and meet the growing payroll needs that come with an increase in government contracting work.