Commercial & Government Construction Financing Options
Being a government contractor offers you very many benefits. The government gives incentives to small businesses to work with them. Getting financing from the government can be very helpful. There are very many financing options for construction. Factor slow-paying invoices is one these options. A factoring program allows you to finance any slow-paying invoices. In this case you dont have to wait for the government to pay. You will be able to get an advance from the factoring company in this case. When the invoice is paid by the government the whole transaction is concluded. You can assign the proceeds of the invoice when you have government invoices. You will pay them to a third party who will now give the funding.
One of the other finance options is the finance purchase orders. Small businesses work with vendors and they have to make payment. This has to happen before the product is shipped. This demand will be a great problem in a case where you have a huge order. If you dont have enough money to cover the payment, this will be very useful. The government purchase order will be very useful. This funding normally pays all supplier costs. You should ensure that these costs are associated with a specific order. This allows you to purchase the goods and fulfill the order. In this case the transaction concludes and settles once the government gets the products and pays for it.
Another financing options includes financing your supplier payments. This applies where you manufacture your own goods directly. If you want to build inventory this may also work. This is a special type of supply chain financing. If you wish you may be able to buy raw materials from your suppliers. You will be able to grow your business in this case because you will be in a position to fulfill orders. When it comes to supplier financing there is no specific order that can restrict it.
Another financing option provided is financing your inventory. A company with unsold inventory or one that manufactures its own goods can greatly benefit from this. The solution here is like that of a line of credit that is secured by inventory. After inventory sells and generates revenues the line is repaid. Most inventory financing helps finance larger companies. There are also some limitations that apply. It can be very expensive and time consuming to actually set this line up. This is because you must evaluate the initial inventory. The distresses sale value will be the one to determine the inventory’s value. For some inventory this value can be lower than the market value. You can finance your company’s assets using asset-based lending. In this case the structure is going to be determined by the asset that is being financed.