Government Contract Financing: How Does Mobilization Funding Work?

Veteran-Run StreetShares Helps Meet Contractor Financing Needs

In addition to providing a marketplace of opportunities, FedBid aims to deliver additional contracting related resources to our Sellers. We are sharing an excerpt of a blog post from our partners at veteran-run StreetShares about how they can help address Seller’s funding needs. Established in 2013, StreetShares is the business funding source for government contractors with an array of flexible financing solutions to fund accounts receivables, improve cash flow, and provide mobilization funding through lines of credit or term loans.

Read the full blog on the StreetShares website

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.

Learn how one government contractor used StreetShares contract funding options.

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 StreetShares has mobilization funding programs that work through the entire lifecycle of the contract while you wait to get paid through the invoice. 

Best Time to Seek Contract Financing

The best time to seek contract financing is before you even have the contract in hand. Building relationships with financial partners beforehand can make the financing process much easier.

Knowing you have financing in place can help you bid on the project yourself or present your ability to fulfill your part of a contract as a sub to a prime contractor. At StreetShares, we can actually mobilize your funding, which would include term loans and lines of credit early in the process along with contract financing after you have delivered to the government.

For more information on how to access the full range of StreetShares' products, check out the full blog on their website

Author: Shauna Vo Pulayya, StreetShares Director of Content Marketing

Publisher: FedBid, Inc

Released: September 21, 2017