Securing a government contract for goods or services that you can provide is a great way to grow your small business. However, most small businesses simply lack the resources to handle government contracts all on their own. Contract financing will generally be necessary, so you can procure the raw materials needed to make the finished goods you sell to the government agency. Can contract financing really help your small business grow and become better established?
How contract financing can result in business growth
The trouble with accepting government contracts is that your small business has to be able to purchase all materials needed ahead of time. If you can’t pre-pay your suppliers and still be financially solvent, you’ll definitely need contract financing in the picture. You also need to be aware that payment from a government agency will probably be between four and eight weeks in coming. That means you have to be able to survive until that payment does arrive. This is another strong indicator that some form of contract financing will be necessary in order for you to proceed with the government contract.
Before you bid on a contract
Ideally, you should have your contract financing in place before you even bid on any government contract. The worst-case scenario here is that you bid on a contract and win it, but lack the funding to come through on the agreement and provide the government agency with promised goods or services. Make sure you have your funding in place first, and then you can go all out trying to win the contract. If your bid should win the contract, it can help your business in a number of ways. First, the fact that you successfully fulfilled the terms of the contract will reflect favorably on your business as a can-do type of operation that can be relied upon. Other large contracts that might be available will then be within your reach, and can help your business grow even more.
If you’re considering contract financing, we may be able to provide the financial assistance your organization needs. Contact us at GM Capital Group, so our financial experts can work with you on a strategy that will help you accomplish your business objectives.