What is Government Invoice Factoring?
Government Invoice Factoring is a financial solution designed for businesses that provide goods or services to federal, state, or local government agencies. Instead of waiting 30, 60, or even 90 days for payment on government contracts, companies can sell their outstanding invoices to a factoring company and receive immediate working capital.
This type of funding is particularly valuable for small and mid-sized businesses that win government contracts but need steady cash flow to cover payroll, purchase supplies, or take on additional projects while waiting for slow-paying agencies to issue payment.
How Government Invoice Factoring Works
The process of factoring government invoices is straightforward and much faster than applying for a traditional bank loan:
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You Deliver Services or Products
Your business fulfills its contract obligations and issues an invoice to the government agency. -
You Sell the Invoice to a Factoring Company
Instead of waiting weeks or months for payment, you sell the invoice to a factoring company like First Capital. -
Immediate Advance Funding
First Capital advances you a significant percentage of the invoice value—often within 24 hours. -
The Government Pays the Invoice
When the agency pays the invoice in full, the funds go directly to the factoring company. -
You Receive the Remaining Balance
Once payment is received, First Capital releases the remaining funds (minus a small factoring fee).
This process ensures that you never have to put your business on hold while waiting for government payments.
The Benefits of Government Invoice Factoring
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Improved Cash Flow: Get paid quickly instead of waiting for slow government payment cycles.
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No Debt Incurred: Factoring is not a loan—it’s an advance on money already owed to you.
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Flexibility: Use funding for payroll, materials, equipment, or expansion.
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Growth Opportunities: Take on larger contracts without worrying about cash flow shortages.
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Fast Approvals: Unlike bank financing, factoring approvals focus on the creditworthiness of the government agency, not your business.
The Process with First Capital
At First Capital, we make Government Invoice Factoring simple and efficient:
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Apply and Get Approved: Our team reviews your government contracts and invoices.
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Submit Your Invoices: Send us your government receivables.
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Receive Advance Funding: Get up to 90% of the invoice value within 24 hours.
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We Manage the Collection: The government agency pays us directly.
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Get the Remaining Balance: Once payment is collected, we release the reserve funds minus a small fee.
Our streamlined process gives contractors predictable cash flow, allowing them to focus on performance, not payment delays.
Why First Capital is the Go-To Source for Government Invoice Factoring in Texas and Nationwide
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Specialized Experience: We understand the unique requirements of government contracts and how to factor them efficiently.
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Nationwide Reach: Although based in Texas, First Capital provides factoring services to businesses across the United States.
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Fast Funding: Our clients receive cash flow within 24 hours of invoice submission.
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Personalized Service: We pride ourselves on being more than just a funding source—we are a long-term partner in your business growth.
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Trusted Reputation: First Capital has helped countless businesses secure the working capital they need to thrive while working with government agencies.
Final Thoughts
Government contracts can be highly profitable, but the long payment cycles can strain your business finances. Government Invoice Factoring with First Capital gives you the working capital to stay competitive, take on more contracts, and grow with confidence.
If your business provides goods or services to government agencies and needs faster access to cash, First Capital is your trusted partner in Texas and nationwide. In addition, we provide Purchase Order Financing for large orders. Contact Us Today!