Factoring Government Invoices and Getting Paid in Days Rather Than Months

Factoring government invoices gives businesses an opportunity to get paid in days rather then months. Being able to land a government contract, whether large or small, can be a big coup.

The government is generally a very reliable customer with a good deal of money to spend. Because of this, it is fairly easy to get paid upfront for a government jobs by selling the contract invoice (receivables) to a Factor. Factors will purchase the contract invoices of companies who have customers with good credit. Most government agencies will qualify.

One problem with alternative sources of financing (those besides invoice factoring) is that it can take some time before a business is able to get money. For example, if a company wanted to apply for a loan, they would have to gather all of the necessary paper work, fill out the loan applications and then wait for the banks decision.

This could take some time and all the while, the company has to come up with ways to continue to fund its operations and keep things going. If they need money right away, waiting could be disastrous. Invoice factoring can shorten this process a great deal. It is possible for businesses to receive cash by factoring their government invoices in a matter of days rather then the weeks or months it would take to apply for and receive a loan.

There are several disadvantages to taking out a loan in order to raise capital for a business, amongst them is time. There are times when a business needs money right away. They simply can't wait. Things may have gotten so dire that without a quick infusion of cash, a company will have to close their doors. If they have a contract to provide services or products to the government, they have an opportunity to generate cash right away by selling them to a factor. When a factor purchases government invoices, they will pay for them upfront.

As a result, the company does not have to wait until after they have completed the job before they are paid. Now, a company won't get full value for the invoices. Instead, they are purchased at a discount, though they will get the remaining amount of the invoice eventually, after the factors collects on it, minus a free charged by the Factor.

Government contracts, especially big ones, may require large amounts of capital. Even if the job isn't a big one, if a business does not have cash on hand, it can be difficult for them to fund the operations. This is because they will have to pay for personnel to complete the work as well as pay fixed expenses.

Waiting until the job is completed and the government has paid, simply may not be an option a business can afford. Invoice factoring can be a great help. It is possible for businesses to have money in days to cover all of the aforementioned expenses. This allows them to fulfill their contract and pay their bills, all without taking out a loan.

Paragon Financial is a full service factoring company. Factor your receivables and improve cash flow without additional debt with our experts in invoice financing, po funding, and accounts receivable factoring.

From:http://www.hiphopmails.com/clickbank/finance/article-factoring-government-invoices-and-getting-paid-in-days-rather-than-months.html

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