Small businesses are the backbone of the American economy, and yet when they experience some kind of financial trouble, the big lending institutions are often reluctant to help them out, as they don’t meet their lending criteria.
Here at American Prudential Capital, we know the importance of small businesses, and that’s why we’ve made it our mission to provide financial help to all kinds of small companies, from distribution and manufacturing companies to government contractors.
If you’re a government contractor, you’re no doubt well aware of some of the issues of your type of business.
Not only are you subject to the normal problems suffered by any small business, such as cash flow, staffing problems, and issues with time management, but you’ve also got to operate in compliance with all government regulations. This makes it more important than ever to maintain a steady cash flow to ensure that your operation runs smoothly, you can complete your projects on time, and that you have adequate funds to meet payroll.
When things get tough, traditional funding routes often aren’t a good solution. Many times government contractors don’t meet the strict lending criteria or the traditional funding institutions simply can’t approve and release the funds you so desperately need, quickly enough.
And that’s where we can help, as we have a unique understanding of your particular kind of a business plus, more importantly, we have the flexibility needed to react quickly to a loan request. We’re able to provide the money you need at very short notice, thus keeping your business running smoothly so that you can satisfy your clients.
How does funding for Government Contractors work?
We offer several forms of alternative funding, depending on your needs, and the collateral you have on offer. One of our most common forms of alternative funding is invoice factoring, where we’ll pay you a percentage of your accounts receivable when you sell your outstanding invoices to us. This works particularly well for government contractors, as we know that your clients will have an excellent credit rating and payment record, meaning that there’s minimum risk to our investment.
If you’re a larger company we also offer invoice funding as a way to release the cash you’re owed into your business. For a small fee, we’ll give you the balance of your accounts receivable, but still allow you to keep full control of your invoices. If you’d like to find out more about invoice factoring or invoice funding, get in touch with a member of our team who will be happy to explain the benefits for you as a government contractor.
If you supply goods to government departments, you may be eligible to apply for purchase order (PO) financing, although this is only available to companies that resell third-party goods or use a third-party manufacturing company.
However, it’s a really simple process to set up, and could really help your business with its cash flow. Once again, should you require any further information, please contact our team.
Benefits of Government Contractor funding
There are several benefits to Government Contractor funding, not least of which is the speed at which it can be transacted, wherein a Government Contractor can be quickly provided with the cash needed for its business requirements. Another aspect of flexibility, however, is that the Government Contractor can choose to sell all of its invoices to an alternative funding company, or just a few which would generate sufficient cash to cover any existing shortfall.
Then too, if most or all invoices are then managed by the alternative funding company, the Government Contractor is relatively freed up from the need for collections and maintaining a large receivables staff. This would allow it to concentrate on its core business, which is providing personnel to clients, rather than invoicing and collections.
Another benefit is that to qualify for funding, a Government Contractor might not need to have a stellar credit history itself because an alternative funding company is more concerned with how credit-worthy the clients of that company are. If clients typically pay their invoices on time, that indicates that the alternative funding company incurs less risk from purchasing those invoices and then attempting to collect on them.
Contact us now to find out more
As you can see, there are a number of options for alternative financing for government contractors, which will give you the cash you need without having to take out a long-term loan. To speak to a member of our team, call us now or complete the online funding application on this site, and someone will get back to you as soon as possible.