Are you a goods or service provider who’s looking to branch out into the lucrative world of government agency contracts? If so, the Commercial Finance Group in Atlanta can help. While government contracts can be very attractive (more on that below) they also come with some drawbacks that many businesses fail to consider before signing on the dotted line. With asset-based lending services from CFG, you can be better prepared to expand your business into the world of government projects without sacrificing income or risking cash flow problems down the road. Keep reading to learn more or contact us today!
Advantages Of Government Contracts
There are a few very compelling reasons that many companies seek to supply goods and/or services to government agencies. As Marco Terry explained recently for The Business Journals, these reasons include the fact that government agencies–federal, state, and local–make purchases all year round, in good economic time as well as bad. Government agencies also tend to buy in large quantities and they have mandates to support local economies through purchases from small to mid-sized companies. These programs include special designations such as HUBZone, 8(a) small business, and women-owned small business (among others).
Disadvantages Of Government Contracts
Now that we’ve discussed the positive aspects of earning government agency contracts, it’s time to flip over the coin and inspect the disadvantages. While many small to mid-sized companies tend to feel that the good of larger, more reliable government contracts outweighs the bad, it’s important for you to have the full picture before you make your final decision.
In order to land government contracts, you’ll have to learn how to jump through a seemingly never-ending collection of bureaucratic hoops. For some companies, putting themselves in the position to qualify for a government contract is cumbersome, requiring a great deal of time and energy that small business owners don’t always have. The steep learning curve of how to deal with and report to government agencies is also a hindrance. And just when you’ve learned the entire process at the local level of government, it’s likely that you’ll have to learn an entirely new process for the state and federal levels!
Another disadvantage of capturing government contracts is that you’ll have to deal with larger than usual orders. Yes, we noted that large orders are a benefit of working with government agencies above, but for small businesses with limited staff or equipment, trying to fill an order that’s 10 or even 100 times the normal size can be overwhelming.
Finally, we come to one of the biggest disadvantages of selling the government, which is that local, state, and federal-level agencies are often very slow to pay their bills. It’s not uncommon for some government agencies to take 30 or even 60 days to deliver payment. Unless you prepare yourself for this delay, you could find yourself with a serious lack of working capital when the job is done. That’s where our asset-based lending services come in.
Land Big Government Contracts With The Help Of Asset-Based Lending!
So what does a lending solution like our asset-based loans have to do with helping small businesses land government contracts? We’re so glad you asked! To overcome the delay of payment and other challenges associated with government contracts, what small business need isn’t the traditional commercial loan. These lending solutions are far too complicated to acquire and involve long-term payment plans. What small businesses really need is a way to bridge the gap between job completion time and invoice payment. Asset-based lending is a great way to accomplish exactly that.
With our custom lending solutions, you can:
Get An Advance On Slow-Paying Receivables
Don’t have enough cash on hand to pay your bills and employees while the government agency you’re working for puts the invoice through its slow payment process? Asset-based lending is a way to turn that unpaid invoice into cash. With our help, you can literally borrow money from your future self to help meet needs in the present.
Get Access To Cash To Expand Production Potential
If your problem isn’t how long the government agency might take to pay, but rather finding a way to expand your capacity in time to meet the demands of the contract, asset-based lending can again be a viable solution. By getting an advance on your unpaid invoices, you’ll be able to finance the purchase of equipment, hiring of additional staff, or anything else you might need to complete the contract on time.
Want to learn more about how asset-based lending can help you land lucrative government contracts? Contact the Commercial Finance Group in Atlanta today.
