Factor This Into Your Decisions on Generating Working Capital Without Incurring Debt
The US Government spends over $500 billion (2009) in Government Contracting.
The US Government purchases everything from shirts for the military, to satellite missiles software! And in many cases, there is only one bidder for the contract.
Many of these contracts are what the Government calls "Set Asides" - meaning they are set aside for women, veterans, minority, HUD Zone, and other disadvantage categories, to ensure that small business to the multi-billion dollar corporations, have an equal opportunity in obtaining government contracts.
(The mega corporations, are not allowed to bid on contracts that are "set aside" for small businesses) And because there are Lenders, whose sole purpose, is to eliminate the cash flow or working capital concerns of the small business owners, they, can bid on Government contracts, with confidence.
These Lenders are called Factoring Companies, or Accounts Receivable Lenders.
For a fee, these Lenders pay the small business owner, a high percentage, of the total Invoice amount when they Invoice the Federal Government for services completed or products delivered.
The US Government, must provide, by law payment within 30 days.
however, the Invoice must be completed and presented without error, alone with other stipulations, that can easily prevent a new and small business owner from being paid within the first 30 day period.
In addition, if the small business owner, has expenditures, such as payroll, that has to be meet within 2 weeks, and the Government check won't be in the mail, until, 4 weeks, this, could create a serious cash flow issue.
Accounts Receivable Lenders eliminate these concerns, for Government vendors.
They charge a fee, to make the cash flow problem go away.
The fees are tax deductible and can serve as a legal tax write off.
Experienced, Government vendors, set up their Accounts Receivable accounts "before" they bid on the Government contract.
This way, they can be sure, the contact they are seeking, qualifies for factoring or accounts receivable funding.
Factoring is not a loan, and is considered to be, asset based financing.
Congress voted into law (April-1984), the Assignment of Claims Act, which makes it legal for Government vendors to factor their invoices.
Factoring is a bridge over trouble waters, and has helped thousands of small business owners to do business with the world's largest customer, the US Government.
Factoring is older than America, and is extremely popular in Europe today, as it was with the Pilgrims, when they first came to America.
Congress approved the first Assignment of Claims Act, on October 9, 1940, to assist in the National Defense Program.
It was later amended in, April of 1984.
(31 U.
S.
C.
3727)
The US Government purchases everything from shirts for the military, to satellite missiles software! And in many cases, there is only one bidder for the contract.
Many of these contracts are what the Government calls "Set Asides" - meaning they are set aside for women, veterans, minority, HUD Zone, and other disadvantage categories, to ensure that small business to the multi-billion dollar corporations, have an equal opportunity in obtaining government contracts.
(The mega corporations, are not allowed to bid on contracts that are "set aside" for small businesses) And because there are Lenders, whose sole purpose, is to eliminate the cash flow or working capital concerns of the small business owners, they, can bid on Government contracts, with confidence.
These Lenders are called Factoring Companies, or Accounts Receivable Lenders.
For a fee, these Lenders pay the small business owner, a high percentage, of the total Invoice amount when they Invoice the Federal Government for services completed or products delivered.
The US Government, must provide, by law payment within 30 days.
however, the Invoice must be completed and presented without error, alone with other stipulations, that can easily prevent a new and small business owner from being paid within the first 30 day period.
In addition, if the small business owner, has expenditures, such as payroll, that has to be meet within 2 weeks, and the Government check won't be in the mail, until, 4 weeks, this, could create a serious cash flow issue.
Accounts Receivable Lenders eliminate these concerns, for Government vendors.
They charge a fee, to make the cash flow problem go away.
The fees are tax deductible and can serve as a legal tax write off.
Experienced, Government vendors, set up their Accounts Receivable accounts "before" they bid on the Government contract.
This way, they can be sure, the contact they are seeking, qualifies for factoring or accounts receivable funding.
Factoring is not a loan, and is considered to be, asset based financing.
Congress voted into law (April-1984), the Assignment of Claims Act, which makes it legal for Government vendors to factor their invoices.
Factoring is a bridge over trouble waters, and has helped thousands of small business owners to do business with the world's largest customer, the US Government.
Factoring is older than America, and is extremely popular in Europe today, as it was with the Pilgrims, when they first came to America.
Congress approved the first Assignment of Claims Act, on October 9, 1940, to assist in the National Defense Program.
It was later amended in, April of 1984.
(31 U.
S.
C.
3727)
Source...