Invoice Factoring
Turn an approved government invoice into working capital now.
Let's size your factoring facility.
Two questions to start. No obligation, no credit pull.
How it works
Once work is performed and invoiced, the money is no longer in question. Only the timing is. Invoice factoring converts those approved government receivables into working capital immediately, advancing against the invoice and settling when the agency pays. Because the agency is the payer, the credit question is about the government rather than about your balance sheet, which is what makes factoring accessible to contractors that banks decline.
Government receivables are unusually well suited to factoring for exactly that reason: the counterparty risk is minimal, and the delay is procedural rather than a sign of distress. Federal payment under the Assignment of Claims Act can be formally directed to a financing party, which is the mechanism that makes government factoring work.
The tradeoff worth understanding is cost structure. Factoring prices per invoice and per period outstanding, so it is efficient when you need capital in days and are financing a defined receivable, and less efficient than a revolving line when the need is continuous. Contractors with steady, predictable billing often start with factoring and graduate to a contract line as their history builds.
How the facility is structured.
Capital released against receivables you have already earned.
The government’s obligation to pay carries the transaction, not your credit history.
Built for speed once an invoice is approved, rather than a full credit process each time.
Available capital grows as your invoicing grows, without renegotiating a fixed limit.
Invoice Factoring questions, answered.
Is invoice factoring a loan?
No. Factoring is the sale of a receivable rather than borrowing against it, which is why it does not add debt to your balance sheet in the way a term loan does.
How does factoring work with federal payment rules?
The Assignment of Claims Act lets you assign payment on a federal contract to a financing institution. Once the notice is filed and the agency acknowledges it, payment goes to them directly rather than to you.
When is a contract line of credit a better choice than factoring?
When the need is continuous rather than invoice-by-invoice. Factoring prices per invoice and per period outstanding, so a revolving line is usually more efficient for contractors with steady billing and enough history to support one.
Does the agency know my invoices are factored?
Yes. A federal assignment of claims is a formal, documented process. The agency is notified and payment is directed accordingly. This is routine and well established in government contracting.
Ready to fund your contract?
No obligation, talk to a govcon financing specialist, not a call center. We'll structure capital around your award.