Landing a trucking government contract is a great opportunity for your businesses. With that said, government projects can quickly slow down your cash flow.
Government agencies take anywhere from 30 to 60+ days to pay, making it difficult for you to take on new projects while you wait for payment.
Invoice factoring for government contracts speeds up your working capital by allowing you to receive payment upfront to ensure you have the funds necessary to pick up your next load.
How Does Factoring for Government Agencies Work?
Factoring your transportation invoices is a quick and easy process that comes with many benefits.
Once you submit your unpaid government trucking invoices to a factoring company, the factor will verify that the load has been delivered and advance you the cash within hours. Advance rates can be as high as 97%. The remaining amount is held in a reserve account until the factoring company has received payment from the government agency for the full amount of the invoice.
Once the invoice is paid, the factor releases the remaining amount back to you minus a small factoring fee.
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The Benefits of Factoring Government Freight
A large government contract has the potential to slow down your working capital and make it difficult to successfully run your business. Whether you’re working with FEMA, the Department of Defense, the Coast Guard, the National Guard or any other government agency, factoring unpaid invoices can get you the funds you need quickly, which is especially helpful if your hauling supplies for disaster recovery.
Some benefits of invoice factoring include:
- High advance rates
- Low fees
- No minimums or maximums
- Same day funding
- No setup fees
- No long term contracts
- Bad credit is okay
- No debt
- Fuel advances
- Fuel cards
Factoring for FEMA Loads
Trucking demand is high for months when a natural disaster occurs. Delivering loads for FEMA can be a little more challenging than normal. Depending on which state you are traveling to, some are better prepared than others.
It’s important for truckers to be patient when delivering loads to these areas while waiting for instructions. Delivery sites are often crowded with other trucks trying to drop off supplies and sometimes it won’t seem as if anyone knows the proper instructions.
Hauling loads for disaster relief will not only earn you a paycheck but will help out those in need during these difficult times.
Government agencies are slow-paying and even if you’re working through a broker, payment for loads will still be slow. This is why invoice factoring is a great option for truckers looking for a boost in cash flow when working with government contractors.
Factoring government transportation contracts also guarantees a strong cash flow without any debt. It doesn’t matter if you have bad credit history or are just starting out, factoring is flexible and tailored to your trucking businesses specific needs.
Types of Government Transportation Contracts for Disaster Recovery
There are tons of government agencies that exist and trucking companies can be hauling freight for anyone of them when it comes to disaster relief. If truckers want to pick up government contracts during these desperate times, they should look into bidding on transportation contracts within the following agencies:
- US Coast Guard
- Department of Health and Human Services
- National Guard
- National Emergency Medical Services
- Army Corps of Engineers
- Department of Defense
- Department of Transportation