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| Government Contractor Factoring and Financing |
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| United Capital
Funding Corp. has an extensive history of providing
government receivable finance to contractors around the
United States. Our clients provide a variety of
different products and services to the U. S. government
and related agencies. We can normally wire you 80% of
the amount of your invoices within 24 hours of the
invoices being approved by the government agency. Below
are several case studies detailing typical scenarios
where United Capital assisted a government contractor
with their working capital needs. |
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Government Contracts Factoring Case
Study: DOD Contractor
United Capital was approached by a
midsized ammunition manufacturer (ABC) based in
Central Florida. The organization had a strong
management team but the entity was thinly
capitalized. ABC had recently upgraded and
automated several of the manufacturing lines.
During this process they purchased a great deal
of equipment. Although the equipment was
financed through bank financing, the capital
expenditures hurt cash flow and limited ABC’s
ability to finance their working capital through
institutional channels. ABC, Inc. always had
large accounts receivable balances due from the
Federal government but they needed liquidity.
United Capital was able to structure a facility
where they provided cash within 24 hours of an
invoice being approved by the government. These
advances enabled ABC, Inc. to expand their
operations and bid on additional government
contracts. ABC was able to focus on
manufacturing and sales. ABC no longer had to
deal with the stress related to servicing
payroll needs or keeping suppliers happy. ABC’s
profitability increased over 500% during their
relationship with United Capital. |
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Government Contractors Financing CASE
Study: IT Staffing Company doing business with
various government agencies including HUD, USPS
and GSA.
An IT staffing company was having difficulty
meeting its working capital demands. The Company
had traditional bank financing in place but they
were constantly bumping up against the credit
line maximum imposed by the bank. At the same
time, the bank continued to impose stricter loan
covenants. The bank’s strategy made it nearly
impossible for the entity to expand. The Company
was doing business with various government
agencies including HUD, USPS and GSA. The
Company evaluated a factoring strategy to
replace the traditional financing. In five days
United Capital paid off the bank and freed up
more than $500,000 for the Company. This
approach provided the Company with the ability
to procure new government contracts without
having to be concerned that they may not have
enough capital to meet the payroll requirements. |
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Invoice Factoring of Government Contracts Case
Study: Public Relations Company serving various
government agencies including the Center of
Disease Control and Prevention, and the Centers
for Medicare and Medicaid Services.
The upfront demands for working capital in the
marketing/PR space require business’s in that
arena to have a very large amount of working
capital. Various media outlets require payment
up front for advertising. In many cases, the
businesses have minimal fixed assets and have
difficulty procuring credit. UCFC was able to
leverage amounts due from various government
agencies including the Center of Disease Control
and Prevention and the Centers for Medicare and
Medicaid Services to provide the company with
the working capital it needed to meet the
demands of the media outlets. |
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Companies that benefit from factoring of government
receivables may be contractors for federal, state or
county contracts. In many cases, MWOB (Minority and
Women Owned Businesses) and SBA 8a organizations are
eligible to factor government receivables.
When working with the Federal Government, any
receivables financing must follow the guidelines set
forth in the Assignment of Claims Act and the processes
set forth in the Federal Acquisition Regulations. United
Capital is an expert in these processes. |
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