Government Factoring

How to Win and Fund Government Contracts: A Complete Guide

Funding Awards and Government Invoices with Government Contract Factoring

Government Contract Financing through Government Receivables Factoring Company

Bankers Factoring Government Receivables Financing-Be ready to win that Govt RFP

Funding Government Contracts

Government Contract Funding for Government Vendors through Government Contract Factoring Company

We are one of the few purchase order funding companies that understand and seek out government contract funding opportunities, and we understand that business loans and bank financing is even harder to get. Bankers Factoring understands the federal assignment under the FAR and even has a program for start-up government contractors to factor government invoices and government purchase orders with government contract financing, which together meet your and government agency supply chain financing needs.

Dedicated Government Contract Funding Desk

We have a dedicated desk for government contract factoring and government contract PO funding and did our first government receivables deal in 1998. We humbly believe we are the best invoice factoring company for government contract financing at all levels of government.

Turned down for a small business loan? We can help since we understand explosive business growth, bruised personal credit, the need for a faster funding process, and start-ups lacking any business credit. As a government factoring company, we are transaction driven and look to the creditworthiness of your government customer.

W even have special programs for disaster funding when you need short-term financing for labor and raw materials.

A Dedicated Government PO Funder and Factoring Company

As a dedicated invoice financing and government purchase order funding company for start-ups that deal with financial challenges and cannot get a line of credit or supplier financing from a traditional lender or bank. We understand the money troubles that start-ups have and the fact that they can’t wait to be paid.

Fully 23% of U.S. government contracting funds go to small businesses. However, most government contractors cannot get critical funding. Firms include staffing agencies, janitorial services, merchandise providers, and technical consultants. These firms can offer valuable services to fulfill small and large federal contracts. Many use government invoice factoring and purchase order funding to fulfill the government contracts they have been rewarded and to fill working capital gaps. Bankers Factoring also has special programs for Veteran-Owned Businesses selling to the US Government.

The biggest challenge after winning the award is getting government contract funding. As a government contract financing company, Bankers Factoring, a government factoring & PO funding company, compiled this basic guide about what you need to know to win and fund government contracts so you can grow your business, scale your team, manage working capital, and improve your bottom line. We will walk you through your government contract financing options, including government factoring and government PO funding.

We also have special programs for payroll financing for federal government contracts for business owners that we think is the right solution for labor-intensive government vendors. Bankers is a government invoice factoring company with 25 years of experience.

How to Prepare for and Find Government Contracts

Finding government contracts can feel like searching for that proverbial needle in a haystack. Uncle Sam puts out so many calls for proposals each day. It can overwhelm the most intrepid small business owner to sort through them and select the most likely options. Before you search online databases, be sure you are ready to take on the complexities of a government contract lineup with a government purchase order finance company on your side.

The last thing you want is to make a high-volume mistake that could cost you big in lost products, delayed checks, and fines. Realize, too, that many contracts show low-profit margins. This can be harder to finance for private companies, although they result in high business volume and a regular revenue stream, but with cash flow challenges on slow-paying government entities.

You can also read our article on government contract financing solutions for information on how we work as a federal purchase order finance company.

Complex Government Contract Financing

Due to the sheer complexities of federal contracts, some companies choose to work as a subcontractor for another firm to learn the ropes of government contracting first. Working as a subcontractor also helps bolster your first bid. This will show your company that it can deliver the goods and manage the back-office end of a federal contract. You can use the small business administration or SBA SUBNet website to search for subcontractor opportunities.

Once you know the time is right for you, seek federal funding. Make sure to register with the System for Award Management (SAM) using your D-U-N-S number. Signing up for SAM is free and easy. However, unscrupulous companies will send pushy emails offering to shepherd you through the process in exchange for hundreds or thousands of dollars. They are scammers. Ignore them. Just go to the SAM site, fill out the form, press the button, and you’re done.

After you complete the Sam registration step, you can start searching the online federal marketplace. Contracting Opportunity Finder is a newer initiative now part of the sam.gov site. This initiative serves as a searchable database specifically targeted at companies new to U.S. government contracts. It also lets you search by keyword, location, date, or business label. Other government websites like the FedBizOpps database (now part of sam.gov) and each agency’s Offices of Small and Disadvantaged Business Utilization list current bid requests.

Beware of any site that charges you to search for government contracts. All official listing sites are free for many small businesses.

Easiest Government Contracts to Win

The easiest government contract to win is the one you can execute and manage. Government contracting does not require sleight-of-hand tricks in wording or budgets. Just a perfect alignment with what the federal agency wants to purchase and your ability to execute it at a reasonable cost. Searching for small contracts can be a good idea for beginners.

While the high-dollar numbers at the top of thick request packets can entice you, slowly building your contracting business is better. You can even bid on projects worth as little as $3,000. It can seem like much work for a small reward, but it’s always a good idea to make your first errors small. When the stakes are low, the problems are easier to fix. Learn as you go with government projects and understand their payable procedures.

Government Contracting Financing Mentor

Another way to make government contracting easier is to identify a mentor or coach through your industry’s professional organizations. Attending a conference or networking online can give you access to experienced consultants who won’t overcharge you for the benefit of their advice and help. You can also contact a local Procurement Technical Assistance Center (PTAC). The federal government set up PTACs to help guide small businesses through the process of finding and bidding on contracts.

Once you’ve located the right opportunity, decide if you will submit the bid. Although having the federal government as a client can prove profitable, you want your contract to be the right decision for your agency. Ask for advice. Run your forecasts. Use your data. Only then should you make a bid.

Also, asset based loans, SBA loans, and bank financing are available for government contract financing but only for larger companies and not start-up government contractors and their mobilization financing needs. Progress billing will cut you out from most traditional types of federal government contractor lending. We can help both progress billing and your cash flow needs with government invoice financing and government factoring.

How to Bid on Government Contracts

Begin by writing a capability statement. This document includes a thumbnail sketch of your business and a brief statement about your past performance. Your goal in this document is to give the contract agent an idea of your company’s scope and ability to execute a contract and alleviate any concerns.

Typically, a capability statement includes company information, and these are:

• A brief narrative history
• Biographies of key staff
• Certifications required
• Your DUNS number
• A list of your vendors
• A list of your clients

The Federal Contracting Center offers a free online document about writing a capability statement, which can serve as a helpful guide to acquiring US government contracts,

Next, identify the type of solicitation you are responding to. In general, the federal government offers four types of bid solicitations.

Government Contracts have four kinds of solicitations:

1. Request for Quotation (RFQ) – You are not making an offer. You send information and a quote.
2. Request for Proposal (RFP) – You send a full business proposal.
3. Invitation for Bid (IFB) – You submit a sealed proposal to provide a specific good or service.
4. Request for Information (RFI) – A preliminary document used when the government wants to better understand your industry before issuing another kind of solicitation.

No matter what kind of solicitation you are responding to, be sure to read the document thoroughly. Highlight any areas you do not understand so you can ask the contracting officer about them. Don’t be afraid to call your officer since helping companies create their bids is their job. After a careful read-through, use USASpending.gov to research past bids so you can make sure yours is competitive.

It’s also a good idea to research your price estimates thoroughly so you don’t accidentally eliminate your profit margin to get a contract. Finally, when you write your proposal, respond to each requirement in the bid. A missing section can disqualify you from consideration. So have a colleague review the document for completeness and accuracy before submission. Many banks and factoring companies don’t understand government receivables and the culture of selling to the federal government. Bankers has more than 30 years of experience funding government contractors through government invoice factoring.

Types of Government Contracts

The U.S. government offers numerous contract types, including fixed-price contracts, cost-reimbursement contracts, incentive contracts, and indefinite-delivery contracts.

• Fixed-Price Contracts – These are the most common contract the U.S. government extends to small businesses. While they come in multiple forms, all fixed-price contracts have a clear scope of work and a price determined in advance.
• Cost-Reimbursement Contracts – Used when the costs would be too difficult to estimate ahead of the project. These contracts work on a defined spending limit and limit the risk to the supplier.
• Incentive Contracts – In these contracts, the contractor receives an incentive payment determined according to a sliding scale once the project is complete.
• Indefinite-Delivery Contracts – The U.S. General Services Administration says, “Indefinite delivery, indefinite quantity contracts provide an indefinite quantity of services for a fixed time. They are used when GSA can’t determine, above a specified minimum, the precise quantities of supplies or services that the government will require during the contract period.”

Being prepared with all the proper licensing, forecasts, insurance, back-office staff, vendors, and government contractor financing in place can help you secure and manage any type of government contract.

Top Tips to Get Government Contracts

Winning and financing government contracts is a direct and complex process. The steps are clear and well-documented, but the sheer volume of effort required to secure a contract can seem daunting. We will also discuss small businesses using government receivables factoring.

Here are our best tips for submitting a winning bid and becoming a government contractor:

• Know Your Business – The more thoroughly you understand the workings and operations of your enterprise, the more likely you are to submit winning bids for the right RFPs.
• Learn the Rules of Government – Nothing can foul up a proposal or even an award like a contractor who fails to meet government expectations out of ignorance. Save yourself many headaches later by knowing the contract’s guidelines and relevant laws before responding to a request and again before signing an offer.
• Attend Government Conferences – Government agencies frequently sponsor conferences to announce upcoming RFPs or help navigate the world of government contracts.
• Take Advantage of Mentors – You can reach out to experienced government contractors and coaches you know for advice. You can also ask to get matched with the right mentor for you through the SBA Mentor-Protégé Program or the GSA Mentor-Protégé Program.
• Learn to Love Paperwork – You’ll be doing a lot of it! Hiring a specialized manager or administrator with government contract experience is usually best. They will oversee this aspect of the project. Many of these people work as outsourced employees or freelancers, so you don’t have to take on a new FTE.
• Build Relationships at Government Agencies – If the team at your funding agency remains a cloud of faceless bureaucrats in your mind, you’ll find it hard to work with them. However, when you get to know them as people and trust them as partners, they can make your life as a contractor run a lot smoother.
• Keep Trying – If securing a government contract was easy, every small business would have one. Keep learning and submitting better bids until your award shows up. Your tenacity will show them your great customer service.

Financing a Government Contract with Government Invoice Factoring Services

Once you’ve secured a government contract, it’s time to get your government financing in order before you have unpaid invoices. Small business loans can be tough for young startup companies to qualify for, while a government finance company like Bankers is startup-friendly and understands your lack of financial resources. We have almost 100 years of combined experience in factoring government receivables and are one of the few dedicated government factoring companies.

The U.S. government pays contractors on a net 30 to 60 day schedule on government receivables. However, contractors typically have to pay vendors cash upfront before funds come through from the government paying your open accounts receivable. The delay between paying their own bills and receiving the government’s reimbursement can severely strain their cash flow. This is one reason Bankers Factoring offers both government contract PO funding and government factoring solution.

We understand our small business government vendor clients lack liquid assets, can’t wait to collect a payment, and have cash flow problems. They need government contract financing.

Government Contract Financing under the federal acquisition regulations or FAR as a Funding Solution

In 1940, the Federal Government set up legislation for government contractors to get funded, referenced in the FAR or federal acquisition regulations. They can be funded by setting up a mechanism for a contract’s proceeds (but not the execution). These will be assigned to factoring companies, purchase order financing companies, and other lending sources in Subpart 32.8—Assignment of Claims Act of 1940.

Under the Assignment of Claims Act, a contractor may assign monies due or to become due under a contract if all the following conditions are met:

(a) The government contractors contract specifies payments aggregating $1,000 or more per the contract price.

(b) The federal assignment is made to a bank, trust company, or other financing institution, including any Federal lending agency.

(c) The government contractors contract does not prohibit the federal assignment.

(d) Unless otherwise expressly permitted in the contract, the assignment-

(1) Covers all unpaid amounts payable under the federal contract;

(2) Is made only to one party, except that any assignment may be made to one party as agent or trustee for two or more parties participating in the financing of the contract; and

(3) Is not subject to further assignment.

(e) The assignee sends a written notice of assignment together with a true copy of the assignment instrument to the-

(1) Contracting officer or the government agency head.

(2) Surety on any bond applicable to the federal contract; and

(3) Disbursing officer designated in the contract to make payment.

Government contractors contract financing as a funding solution through accounts receivable financing

Bankers Factoring has a specialization in government purchase order financing and contract factoring services, as many banks and factors shy away from factoring government receivables outstanding invoices for small business owners. We understand dealing with a government entity, prime contractors, and government contract payment terms. That’s why we are the best po financing and factoring company for government accounts receivables, and understand you cannot wait 30 days plus to get paid. As a government contractor, receive advance payments with government contract factoring from Bankers to fix your cash flow issues.

You can also read what is government factor financing to learn about our government contractors funding solutions as a factor company for government receivables.

Letter of Comfort or Letter of Financial Capability from a Government Factoring Company

Bankers Factoring can also supply you with a Letter of Financial Capability or Letter of Comfort that shows your government client that you have the funds to deliver on the awarded contract with our government factoring and PO funding products. Your credit rating and credit history are not as important as your ability to fulfill the government contract you will be awarded. Many times this is the hardest hurdle for new government contracting companies to overcome.

What is a Letter of Comfort or Financial Capability? This program provides Bankers Factoring’s clients with a contingent financing commitment to demonstrate to government contracting officers and large US corporations that they possess the financial wherewithal to execute contract awards – Proof you have the operating capital to be a solid government vendor. This results in Bankers Factoring’s clients being able to bid on and win more (and larger) contracts! This program is very advantageous to SMEs, MBEs, WOBs, and DBEs bidding on federal, state, and local contracts. Leverage Bankers’ extensive experience in contract financing.

Government asset-based lending can be hard to qualify for, but not government contract factoring services from Bankers. We even have special programs for start-up government vendors who need credit terms with no hidden fees against government accounts receivable. We understand you can’t wait months for payments, even with progress payments. Our government contractor financing services are for you.

That’s why government contractors turn to contract financing through invoice factoring and PO funding from Bankers Factoring dedicated government invoice factoring desk. Turn government invoices into working capital from one of the few award-winning government factoring companies with the best government contract financing options when a bank loan or line of credit is not available.

Experienced Government Contract Funders and Government Invoice Factoring Company

We bring more than 50 years of combined personal experience to government contract financing and government PO funding. We can provide the working capital you need to fulfill the contracts you have been awarded. Our funding solutions and factoring services will cover your operational costs. Contract financing can also fill those cash flow gaps faster than a bank loan, as we both collect payment and receive the government agencies payment for you under the FAR or similar government regulations.

We want to be your choice as both a government purchase order financing company and a government factoring company for the financing of government orders and contracts. We offer the best solution in invoice government financing for government vendors and with experience dealing with multiple government agencies. We can even help with the mobilization funding component for upfront working capital.

Outstanding invoices from government contracting will no longer stress you out with our government contract financing from a seasoned invoice factoring company with deep experience dealing with government agency and cash flow problems.

Bankers Factoring Funds Government Receivables throughout the United States

From Hawaii to Florida, from Alaska to New York, Bankers and our great customer service can fund your government accounts receivable and government contracts. From the Department of Transportation to the Department of Defense, we understand the culture of the federal government agencies and how to work with government receivables. Have the money for operating costs and employee payroll with receivables financing.

Bankers is ready to give small business owners and contractors their government an instant quote and fix their cash flow situation. Stop waiting for payment from the government with government contract financing. We are the best funding solution for small business government contractors and their working capital needs through government invoice financing.

Ready for the owner-employees of Bankers Factoring to fund your entrepreneurial dreams with government contract funding? Call 866-598-4295 or go to Bankers-Factoring-Application.

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