Government Contract Financing: How Does Mobilization Funding Work?
Today, we’re going to go over one of the most important steps in government contracting – government contract financing and how you can mobilize funding alongside your accounts receivables financing. Without small business contract financing, you’ll find it hard to fulfill those government contracts. Some business owners look toward avenues that aren’t sustainable for their business. Traditional bank loans ask for collateral that add a huge personal risk. Credit cards have high rates and the limits are far below what you need to finance a government contract. Giving up equity and ownership can affect your preferred veteran status.
Government Contract Financing Options That Work
When it comes to contract funding options, a government contractor could look at invoice financing options such as invoice factoring or invoice discounting as well as recourse or non-recourse factoring. One of the main benefits of this contract payment method is that your credit is less of a determining factor in the funding decision because you will most likely have an invoice on hand.
We know the government will pay you, we simply don’t always know when. Similarly, in the case of a subcontractor arrangement, we know that Boeing (for example) will pay you as well. Again, we just don’t know when.
This challenge is why Millennium Millionaire Mindset has mobilization funding programs that work through the entire lifecycle of the contract while you wait to get paid through the invoice.