Government Invoice Factoring
Government invoice factoring is an excellent financial tool for businesses that have been awarded government contracts. Government agencies often take well over 30 days to pay their invoices. This collection delay can cause critical cash flow problems for businesses that rely on cash flow to pay for employees, contractors and supplies. Government factoring companies provide cash for your invoices immediately after you've completed your service or delivered your product to the federal, state or local government agency.
Government contract financing is governed by the Federal Assignment of Claims Act (FACA). FACA is a law for assigning payments under a federal government contract to a financial institution. After filing a Notice of Assignment with the government, they must execute and return the notice (unlike a UCC notice which only needs proof of delivery). FACA requires the government to make contract payments directly to the finance company.