Government Contractor Business Loans: Federal Govt Contractor Financing

Government contractors are any company that is operated privately or publicly traded but not state-owned enterprises—either for-profit or non-profit—and their products and goods are sold under contract for the government. These contractors do business with the single largest buyer of goods and services in the world, The Federal Government of the United States. Furthermore, there are major characteristics that distinguish government contractor businesses from private sector contractors. The first being, they operate in some laws, regulations, and policies which encourage competition to the max to ensure proper spending of taxpayer money and advance socioeconomic goals. Second, their contracts contain mandatory clauses, affording to the Government’s contractual rights. Third, due to the Government’s unique status as a sovereign entity, claims and litigation go by the different procedures of the Contract Disputes Act. Overall, being that Government contractors are particular about how it purchases products and services its primary objective is to ensure competition is fair and open. Products and services are wholly priced, and the government gets what it pays for in return.

Quick-jump to the following sections:

• Bank Loans
• Bank Line of Credit
• Unsecured Line of Credit
• SBA Loans
• Accounts Receivable Financing
• Cash Advance

Bringing us to 2018 for Government contractors, they are working with about $500 billion spent annually at the federal level on goods and services, suggesting there is plenty of room for all types of businesses to have a profitable year from government contracts. Many companies are finding that it is their secret weapon for profits. For instance, half of the government contractors reported that their profitability rose as a result of federal contracting. Thus, certain trends are vital to consider for government contracting businesses in 2018 to secure that companies are prepared for the year ahead. Such as the changes to the NDDA (National Defense Authorization Act). The NDDA impacts government contractors directly as changes concerning set-asides are meant to motivate the federal government to diversify its contracts. Among the changes, NDAA will now require companies to establish small business government subcontracting goals to push for more significant opportunities for small businesses to win and perform on contracts. Another trend revolves around enterprises preparing for weather disasters; If companies learned anything from 2017 and currently, planning for emergencies is an integral aspect for a business of any size. From earthquakes to wildfire to snowstorms, weather patterns over the last year have agitated government contractors across the country. Reports have shown that extreme weather caused $306 billion in damage nationwide in 2017. Thus, government contractors should take time to create a disaster plan and appoint an Emergency Project Manager to make sure work can still get done in event of unforeseen circumstances.

The modernizing Government Technology Act of 2017 has been creating change by shaping information technology obtainment. The products that will come from this act will improve efficiency, cut costs, eliminate duplicative programs, and reduce risks. Contractors will see a technology emphasis on cybersecurity, shared services, commercial off-the-shelf- software, agile development, cloud migration, and data-center consolidation creating more obligations for the contractors in 2018. Opportunities for audit services will bloom too. The government must prepare a set of books; however, the biggest problem has been that the Defense Department hasn’t been able to do so. It plays out this way since the government’s financial management results in statements that can’t be audited until now. The Pentagon began preparing their first financial audit last year, meaning contractors with auditing expertise will have more business opportunities with Defense. Furthermore, another trend of 2018 for government contractors is the growth of mid-tier companies. Also, defined by their annual revenue between $25M and $500M, these companies will address structural procurement barriers including team restriction which will lead to expanded opportunities in the federal market and business growth.

Thus, the next trends are centered around schools and homeland security. The Department of Homeland Security’s increase of $5.4 billion over the last year has many of these dollars spent in the form of contracts to bolster infrastructure and improve surveillance technology. Other commitments will be focused on energy, water, and certain critical facilities. All are coming to fruition as the Presidents campaign promises to modernize infrastructure is beginning to gain traction. Moreover, high profile tragedies have riveted the nation’s focus on helping to protect children and to promote safe learning environments. Therefore, the Act provides more than $2.3 billion to new funding for threat identification, mental health, training, and school safety programs at the Departments of Justice, Education, and Health and Human services. Lastly, eliminating regulations that are onerous, duplicative, or outdated has been another essential trend for government contractors to provide the best and most efficient services.