Contract Credit is an accounts receivable factoring company that specializes in financing government contractors.
Factoring is a financing option for businesses that don't get paid right after completing a job. In some industries, clients' invoices aren't due until a month or more after they receive their products or services. This delay in cash flow makes it difficult for businesses to accept new jobs because they may not have enough funds to pay employees or buy supplies. Small companies, startups, and seasonal businesses whose cash flow fluctuates throughout the year struggle the most with this issue.
Factoring companies like Contract Credit, Inc buy unpaid invoices from businesses, which provides the businesses with an immediate influx of cash. Usually, the factoring company gives the business 70 to 90 percent of the total invoice value up front. Then, the factoring company collects the payments from the customers as they're due. After the factoring company gets paid, they subtract a fee from the remainder of the invoice value and give what's left to the business.
Companies can use the funds from the sale to pay employees, buy new equipment, expand their business, or pay for any other expenses. Federal contracting jobs can be expensive for businesses to fulfill, so selling invoices to a factoring company is a great way to achieve financial security.
Factoring is a popular form of financing in many industries and sectors. Although not all factoring companies work with government contractors, Contract Credit, Inc can help any business with their accounts receivable financing needs.
To get federal jobs, contractors go through a competitive bidding process. Contractors find potential jobs through online databases or other agencies, and they put together a bid in the hopes that the government will select their proposal.
Creating a bid involves extensive research on the costs of the project. Contractors must be sure that their proposed budget is accurate and acceptable to the government agency and that their company can finish the project with the budget they suggest. They may have to negotiate with the agency before being offered the job, which can involve adjusting their budget and plan.
The process of preparing a bid, placing the bid, and negotiating can take months. Before even being offered the job, contractors may spend a lot of time and energy on the proposal. Getting paid for the work can take even longer. Contractors may get paid 30, 60, or 90 days after they complete the work, and events like elections, shutdowns, and holidays can further slow down government payments.
The federal government is a trustworthy client, and contractors should expect to get paid eventually. The government also tends to pay contractors very well. However, this lengthy process can cause cash flow problems, especially for small and mid-sized businesses. Contract Credit, Inc can arrange payments to be assigned as it finances invoices owed by the government.
Factoring is a lifeline for many businesses, and it can be especially valuable for federal contractors. When a contractor has to wait weeks or months for clients to pay, it's hard to know if they'll have access to enough capital to get their jobs done. Factoring your receivables with Contract Credit, Inc provides cash right away, so contractors can be more confident in their ability to financially handle their upcoming government jobs.
Contract Credit, Inc is also faster and easier than applying for a traditional bank loan. Because it isn't a debt that needs to be repaid, businesses are far more likely to be approved by a factoring company if they have bad credit or minimal credit history.
Although the federal government is notoriously slow with paying contractors, they're considered a low-risk client because they are highly likely to pay eventually. Factoring companies consider the trustworthiness of the clients when making an agreement, so federal contractors often get good deals with factoring.
Cash flow is the biggest problem that most small businesses and startups face, but factoring is a great way to help your business grow. When you don't have to wait months for your payments to come in, your business has more opportunities to invest in equipment, hire employees, and bid on new projects. If you're a government contractor, you should consider joining the thousands of business owners who use factoring to keep financial momentum.
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