Advances against government receivables, backed by highly creditworthy debtors.
Federal, state, and local government contracts are among the most creditworthy receivables in commercial finance. The constraint is timing: payment cycles of 45 to 90 days are routine, and administrative delays can push beyond that. The contractor's payroll, suppliers, and bonding requirements come due before the agency processes the voucher.
- 01
Government payment cycles typically run 45 to 90 days
Procurement offices process invoices on administrative timelines. Net-45 to net-90 is standard. Continuing resolutions, budget holds, or audit reviews may extend processing time beyond standard terms.
- 02
Compliance and mobilization costs precede the first invoice
Prevailing wage requirements, bonding, insurance, and security clearances are funded before the first invoice is submitted. Project costs begin at contract start, while the first payment cycle follows the agency's processing timeline.
- 03
Contract awards require capital deployment before the first payment cycle
A new government contract involves hiring, equipping, and deploying resources before the first payment cycle begins. The initial capital outlay precedes revenue by the length of the first billing and payment cycle.
Service and supply contractors with federal, state, or municipal government contracts. Annual revenue $500K to $25M+.
- ·AR aging report
- ·Government contract or task order
- ·Sample invoices submitted to the contracting agency
- ·Voided check for ACH funding
- 01Advance against approved government invoices so the contractor can cover payroll, suppliers, and bonding without waiting 60 to 90 days for the agency to pay.
- 02Government receivables are among the strongest debtors for factoring, the credit risk is the U.S. government.
- 03The desk monitors the receivable and tracks payment within the administrative requirements of the contracting agency. The contractor retains responsibility for collection.
- Funding speedOnce approved
- AdvanceSubstantial against face value
- Debtor typeFederal, state, municipal agencies
- Debtor credit qualityGovernment-grade
- CollectionsMonitored by the desk. Client retains collection responsibility.
- Personal guaranteeNot required on the invoice