3 ways invoice factoring helps government contractors acquire new business

3 ways invoice factoring helps government contractors acquire new business

3 ways invoice factoring helps government contractors acquire new business

Invoice factoring, also known as accounts receivables financing, can help government contractors acquire new business. As cash flow issues can strain company resources and inhibit growth, invoice factoring is a tool where contractors can receive immediate financing against the outstanding invoices owed to them by clients. Kore Capital explains how invoice factoring can help government contractors acquire new business in the long run.

Did you know that in the year 2020, the US Federal Government invested over $665 billion on contracts? However, payment on government contractors can typically take long periods of time. In such situations, invoice factoring can help make payments such as meeting payrolls, buying machines and equipment as well as paying bills.

Better cash flow

Despite the Prompt Payment Act, several government contractors find it difficult to collect invoices on time. Invoice factoring or accounts receivable financing can help improve cash flow with the provision of immediate payments on outstanding government invoices and receivables. This can be helpful to make ongoing payments instead of waiting for 30 days or more for clients to pay.

Immediate benefits

This financing option also provides government contractors the ability to bridge cash-flow gaps quickly and seamlessly. At Kore Capital, we can provide government contractors with up to 95% of their invoice amount that will be credited into their accounts within 24 hours.

Types of contracts

Invoice factoring improves cash flow in several government contracts such as the following: 

  1. Fixed price contracts (level of effort term, price contracts, price redetermination, material reimbursement and more)
  2. Cost reimbursement contracts (cost plus a fixed fee, cost plus award fee and cost reimbursement)
  3. Incentive contracts
  4. Indefinite delivery contracts
  5. Time and materials contractors
  6. Labor-hour contracts
  7. Negotiated contracts

For more information on how invoice factoring can help government contractors, contact Kore Capital today!

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