Government Contractor Financing
Mobilization funding, payment gap financing, and retainage management for federal, state, and local government contractors.
Capital that understands government contracting cycles and AoC requirements.
The problem
You won the contract. The opportunity is real. The profit margin is solid. But there's a capital problem between contract award and payment:
You need to mobilize before the first payment arrives. You need to buy equipment, hire staff, purchase materials, and start performance, all before seeing a dollar from the government.
Then you wait. Net 30 becomes Net 45. Accelerated payments help but don't eliminate the gap. Progress payments come monthly, but your costs are weekly. And 5-10% retainage sits untouched until final completion.
The result
You're operationally capable but capital-constrained. You turn down profitable contracts because you can't fund mobilization. Growth stalls not from lack of capability, but lack of upfront capital.
The solution
Government contractor financing provides capital specifically structured for government contracts. Fund mobilization, bridge payment timing, manage retainage, and grow your government contract portfolio, without the cash flow squeeze.
The mechanics
Government contractor financing provides working capital specifically designed for the unique timing and payment structures of federal, state, and local government contracts. It addresses mobilization, payment gaps, progress payment timing, and retainage management.
You're awarded a government contract (federal, state, or local). You need capital to mobilize operations, purchase equipment/materials, hire staff, and begin performance before receiving payment.
We advance capital for mobilization and ongoing performance costs. This can be structured as invoice factoring (for invoiced work), purchase order financing (for equipment/materials), or specialized contract financing facilities.
For certain structures, we file an Assignment of Claims with the contracting agency, notifying them of the financing arrangement. You perform the work, submit invoices according to contract terms.
As the government pays progress payments, we're repaid from those proceeds. For retainage (typically 5-10% held until completion), we can advance against that as well, so you're not waiting months for final payment.
Why it works
Don't let lack of upfront capital prevent you from accepting profitable government contracts. Fund mobilization costs, equipment purchases, initial staffing, and performance preparation, before the first payment arrives.
Even with accelerated payment provisions, there's a gap between invoicing and payment. Bridge Net 30-45 payment cycles, manage progress payment timing, and maintain consistent cash flow throughout contract performance.
Don't wait until final contract completion to access your retainage (typically 5-10% of contract value). We can advance against retainage, providing working capital months before final payment.
We understand AoC requirements, contracting officer notifications, FAR compliance, and government payment processes. We work in this system every day, you're not educating us on how government contracting works.
Take on multiple simultaneous contracts without cash flow constraints. Bid on larger contracts with confidence. Grow your government business without capital limitations holding you back.
Fit
Government contractor financing works for federal, state, and local contractors across diverse industries. Here's who typically benefits:
Government Contractors — Prime contractors or subcontractors with federal, state, or local government contracts
Contract-Based Business — Significant portion of revenue from government contracts (not just occasional)
Mobilization Needs — Contracts require upfront capital for equipment, materials, staffing, or performance preparation
Payment Timing Challenges — Gap between contract costs and government payment creates cash flow strain
Growth-Oriented — Want to bid on larger contracts or manage multiple simultaneous contracts
Established Contractors — Operating history with government contracts (though startups with strong contracts can qualify)
No current government contracts or contract awards
Purely commercial business with no government contracting experience
Very small contracts (under $50K) where financing costs exceed benefit
Contracts with immediate payment terms (rare in government)
Unable to obtain required bonding or meet contract requirements
Public works, federal construction, state/local infrastructure projects. Specialized financing for construction contractors serving government. IT consulting, management consulting, engineering services for government agencies. Contract-based financing for services contractors. Equipment manufacturing, supply contracts for government agencies. Working capital for manufacturers serving government demand.
Tell us about your contract award and mobilization needs and we'll come back with real numbers: structure, advance, and timeline.
Same-day preliminary answer
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Explore the financial toolsThe alternatives
| Government Contract Financing | Traditional Bank Loan | Standard Invoice Factoring | Line of Credit | |
|---|---|---|---|---|
| Government Expertise | Specialized (AoC, FAR, etc.) | Limited | Limited | Limited |
| Mobilization Funding | Yes (pre-invoice) | Sometimes | No (post-invoice only) | Sometimes |
| AoC Filing | Experienced with process | Unfamiliar | Unfamiliar | N/A |
| Retainage Advance | Yes | Rarely | Sometimes | Rarely |
| Speed to Funding | 3-7 business days | 4-8 weeks | 2-5 business days | 2-4 weeks initial |
| Bonding Coordination | Understands relationship | May not coordinate | May not coordinate | May not coordinate |
| Best For | Government contractors | General business needs | Commercial invoices | Established companies |
Standard factoring is designed for commercial invoices and commercial customers. Government contract financing understands FAR regulations, AoC requirements, government payment processes, retainage structures, and contracting officer relationships. We speak the language of government contracting.
Banks often don't understand government contracting dynamics, get nervous about contract concentration, and struggle with the timing between mobilization and payment. We focus on contract creditworthiness (the government's ability to pay) rather than just your historical financials.
Bonding companies often require liquidity and working capital. Our financing can help you maintain the liquidity needed for bonding capacity, creating a virtuous cycle of contract capacity and capital availability.
Getting started
Share the contract award, contract type, SOW, payment terms, and contracting agency information. We'll review contract structure, payment provisions, and financing feasibility.
We verify the contract is valid, review the contracting agency's payment history, assess contract terms, and determine appropriate financing structure (factoring, PO financing, specialized facility).
If AoC is required for the financing structure, we prepare and file the Assignment of Claims with the contracting agency, notifying the contracting officer of the financing arrangement.
Once structure is finalized and any required AoC is filed, we provide mobilization capital. This can fund equipment purchases, material procurement, initial staffing, or other performance preparation costs.
As you perform and invoice, we continue providing working capital. Progress payments from the government repay the financing. For contracts with retainage, we can advance against that as well.
Typical timeline: 5-10 business days from initial contact to mobilization funding (AoC filing adds 3-5 business days if required)
In depth
Different contract types and agencies have different financing needs. Here's how financing applies:
Prime contracts and subcontracts with federal agencies. We understand FAR regulations, AoC requirements, accelerated payment provisions, and federal payment timing. Ideal for defense, IT, professional services, equipment supply, construction.
Contracts with state agencies, municipalities, counties, school districts. Often faster payment than federal but still require mobilization funding. Less stringent AoC requirements but similar cash flow challenges.
GSA Schedule holders receiving task orders need working capital to fulfill orders. We finance GSA contract fulfillment, understanding the unique structure of schedule contracts and blanket purchase agreements.
Cost reimbursement contracts where you're reimbursed for costs plus fee. We can finance the working capital needed between incurring costs and receiving reimbursement, including indirect cost pools.
Firm fixed price or fixed price with economic adjustment. We finance mobilization and performance costs, with repayment from progress payments or milestone payments as defined in the contract.
T&M contracts with labor hour rates and material markups. We finance the labor and material costs between performance and payment, understanding the invoicing structure of T&M contracts.
Indefinite delivery/indefinite quantity contracts requiring rapid response to task orders. We provide flexible capital that scales as task orders are issued and performed.
Federal, state, and local construction contracts with unique requirements like retainage, progress payments, AIA billing, and bonding. Specialized financing for public works construction.
In depth
Review payment provisions, progress payment schedules, retainage requirements, and accelerated payment eligibility before bidding. Factor financing costs into your price if you'll need capital to perform.
If your financing will require an Assignment of Claims, file it as soon as possible after contract award. The contracting officer notification and approval process takes several days. Do not let this delay mobilization.
If your contract requires bonding, discuss your financing plans with your surety. Some financing structures can actually improve your bonding capacity by improving working capital ratios.
Government contracts often hold significant retainage amounts across multiple contracts. Track retainage balances carefully and consider financing against it rather than waiting months for final payment release.
Government contracting is a long-term business. Build a financing relationship that grows with your contract portfolio rather than arranging one-off financing for each contract.
Common questions
An Assignment of Claims is a notice filed with the contracting agency that assigns your right to payment to the financing company. It's required by FAR 32.802 for certain financing structures. The contracting officer is notified, and payments are directed to the financing company (who then remits to you per the agreement). Not all government contract financing requires AoC, but many structures do.
If an Assignment of Claims is required, yes. The contracting officer is formally notified per FAR requirements. For some structures (like non-notification factoring of government invoices or equipment financing), the contracting officer may not be directly notified. We'll explain which approach applies to your situation.
Yes. We work with contractors serving federal agencies (DoD, DHS, HHS, GSA, etc.), state agencies, municipalities, counties, school districts, and other government entities. Each has slightly different payment processes, but we understand them all.
Government contracts typically hold 5-10% retainage until final completion. We can advance against that retainage (typically 70-85% of retainage amount), providing you working capital months before final contract payment. When the government releases retainage at final completion, we're repaid.
We work with both prime contractors and subcontractors. For subs, the financing structure depends on your relationship with the prime, payment terms in your subcontract, and whether the prime allows AoC filing (if required). Many successful subcontractors use our financing.
Yes. Once the contract is awarded and you need mobilization capital, we can provide funding for equipment purchases, material procurement, initial hiring, or other performance preparation costs, before you invoice your first progress payment.
This depends on the financing structure. Whole-ledger approaches (all government invoices) typically get better rates. Contract-specific or selective financing offers flexibility but usually costs more. We'll explain both options based on your portfolio.
Bonding companies often require working capital and liquidity. Our financing can improve your working capital position, potentially increasing your bonding capacity. We can coordinate with your surety to ensure the financing structure works with their requirements.
Progress payment provisions (where you're paid periodically as work progresses) are perfect for financing. We provide working capital between progress payment periods, repaid as each progress payment is received from the government.
Absolutely. In fact, contractors with multiple concurrent contracts often benefit most from our financing. As your contract portfolio grows, your available capital grows. We can structure facilities that scale with your government contracting business.
In practice
Federal Equipment Supplier
Defense Subcontractor
Federal IT Services
State Construction Contractor
For commercial (non-government) invoices or general B2B receivables financing. Government contract financing is specialized. Standard factoring works for commercial customers.
Learn moreIf you need to fund supplier payments for specific orders (government or commercial). Often used in combination with government contract financing for equipment/material purchases.
Learn moreFor equipment purchases needed to perform government contracts. Preserve working capital by financing equipment over time rather than large upfront purchases.
Learn moreWhether you're mobilizing your first federal contract, managing multiple concurrent projects, or growing your government contracting business, we understand the unique challenges and can help. Let's discuss your specific contract.
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