Government Contract Financing: Working Capital Solutions for Federal Contractors

Government contract financing provides the working capital that federal, state, and local contractors need to fulfill their contracts. Winning a government contract is a major achievement, but the real challenge often comes next: funding the work while waiting 30, 60, or even 90 days for payment.

Noble Funding has been providing working capital to government contractors for over 20 years. With an A+ BBB rating and zero complaints since 2005, we understand the unique cash flow challenges contractors face and provide fast, flexible solutions to keep projects moving forward.

What Is Government Contract Financing?

Government contract financing refers to various funding solutions designed specifically for businesses that work with government agencies. These solutions help contractors manage the cash flow gap between performing work and receiving payment.

Common forms of government contract financing include:

• Contract financing loans: Working capital secured by government contracts
• Government invoice financing: Advancing funds against outstanding invoices
• Progress payment financing: Funding based on work completed but not yet invoiced
• Contract assignment financing: Using assigned contract rights as collateral
• Bridge loans: Short-term capital to start or continue contract work

Unlike traditional business loans, government contract financing takes into account the reliability of government payments, even though those payments can be slow.

Why Government Contractors Need Specialized Financing

The Cash Flow Challenge

Government contracts typically pay slowly. While the federal government is obligated to pay, the process often takes:

• 30 days for most invoices (under the Prompt Payment Act)
• 45-60 days in practice for many agencies
• 90+ days in some cases with complex contracts or invoice disputes

Meanwhile, contractors must pay:

• Employees every week or two
• Suppliers within 30 days (or faster for discounts)
• Rent, utilities, and overhead monthly
• Subcontractors within terms

This timing mismatch creates serious cash flow pressure.

Growing Pains with Government Contracts

Winning a large government contract is exciting but can strain your finances:

• Ramp-up costs: Hiring, equipment, and materials needed before revenue arrives
• Mobilization expenses: Getting personnel and equipment to job sites
• Performance bond requirements: Bonding capacity tied to working capital
• Retainage: 5-10% of payments held until project completion

Traditional Banks Often Fall Short

Many banks struggle with government contract financing because:

• They do not understand government payment cycles
• Their processes are too slow for contract start deadlines
• They require collateral beyond the contract value
• They cannot structure around government-specific issues

How Noble Funding Helps Government Contractors

Noble Funding provides junior capital solutions designed for companies with government contracts. Here is what makes our approach effective:

Fast Funding When Contracts Cannot Wait

When you win a contract and need to mobilize quickly, waiting weeks or months for bank approval is not an option. Noble Funding can provide $2 to $3 million in just 2-3 business days.

Substantial Capital for Meaningful Contracts

We offer financing from $300,000 to $10 million, supporting significant contract requirements.

Works With Your Existing Financing

Our junior capital is fully subordinated to any bank or senior secured lender. If you have a bank line of credit, we work alongside it rather than competing.

Flexible Terms

Choose 12, 15, or 18-month terms with six months of early payoff discounts. Match your financing to your contract timeline.

No Personal Guarantee Options

Qualified contractors can access financing without putting personal assets at risk.

20 Years of Experience

With over $1 billion funded since 2005 and an A+ BBB rating with zero complaints, Noble Funding has the track record to support your contracting business.

Types of Government Contracts We Support

Federal Contracts

• Department of Defense (DoD) contracts
• Federal civilian agency contracts
• GSA Schedule holders
• IDIQ and BPA task orders

State and Local Contracts

• State agency contracts
• Municipal and county work
• Public infrastructure projects
• Education institution contracts

Contract Types

• Fixed-price contracts
• Cost-reimbursement contracts
• Time and materials (T&M) contracts
• Labor hour contracts
• Indefinite delivery/indefinite quantity (IDIQ)

Industries Served

• Information technology and cybersecurity
• Professional services and consulting
• Construction and facilities management
• Manufacturing and supply
• Healthcare services
• Engineering and technical services

Common Uses for Government Contract Financing

Contract Startup Capital

A systems integrator won a $5 million federal IT contract but needed $750,000 to hire technical staff and purchase equipment. Noble Funding provided the working capital within days, allowing them to meet the contract start date.

Payroll Coverage During Payment Delays

A professional services firm with $15 million in government revenue experienced payment delays on several contracts simultaneously. Noble Funding provided bridge capital to cover payroll while invoices were processed.

Mobilization for New Awards

A construction contractor won a $12 million Army Corps of Engineers project. They needed $1.5 million to mobilize equipment and hire crew before the first progress payment. Our fast funding got them on site on schedule.

Retainage Bridge

A facilities maintenance contractor had $2 million in retainage held across multiple contracts. Noble Funding provided bridge financing against the expected retainage releases.

Bonding Capacity Support

A growing contractor needed additional working capital to satisfy their surety’s requirements for larger bonds. Junior capital from Noble Funding strengthened their bonding capacity.

Opportunity Capital

A small business contractor identified an opportunity to acquire a competitor with strong agency relationships. Noble Funding’s quick financing enabled the acquisition.

Qualifying for Government Contract Financing

What Lenders Look For

Contract Quality

• Agency reputation and payment history
• Contract terms and duration
• Performance to date
• Invoice approval process

Business Fundamentals

• Revenue size and consistency
• Operating history
• Management experience
• Accounts receivable quality

Financial Position

• Current cash flow
• Existing debt obligations
• Working capital levels
• Profitability trends

Noble Funding Requirements

We work with government contractors that have:

• Annual revenue of $5 million to $150 million
• Active or pending government contracts
• Established operating history
• Reasonable financial position (positive or negative EBITDA considered)

The Government Contract Financing Process

Step 1: Initial Consultation

We discuss your contracting business, current contracts, and capital needs. This helps us understand if Noble Funding is the right fit.

Step 2: Documentation Review

We review:

• Recent financial statements
• Corporate tax return
• Accounts receivable aging (especially government invoices)
• Existing loan agreements
• Bank statements

Step 3: Term Sheet

Within 24 hours, we provide a term sheet outlining the proposed financing structure.

Step 4: Due Diligence

Our focused due diligence examines your contracts, financial position, and business operations.

Step 5: Closing and Funding

Documentation is prepared and executed. Funding can occur in 2-3 business days for qualified borrowers.

Tips for Government Contractors Seeking Financing

1. Maintain Clean Financial Records

Lenders need to understand your business quickly. Well-organized financials speed up approval.

2. Track Government Receivables Carefully

Know the status of every outstanding invoice, including submission date, expected payment date, and any issues.

3. Understand Your Contract Terms

Know your payment terms, invoicing requirements, and any special clauses that affect cash flow.

4. Plan for Growth Capital Early

Do not wait until you win a contract to think about financing. Establish relationships with lenders before you need capital urgently.

5. Consider Multiple Financing Sources

Your bank, invoice factoring, and junior capital like Noble Funding can work together to support your contracting business.

Frequently Asked Questions

Can I get financing based solely on my government contract?

Government contracts are an important factor, but lenders also consider your overall business. Noble Funding looks at contracts, financial position, and business fundamentals together.

How does Noble Funding work with my bank?

Our junior capital is fully subordinated to senior lenders. We coordinate with your bank and sign appropriate subordination agreements when applicable.

What if my business is not profitable?

Noble Funding works with companies that have positive or negative EBITDA. Government contractors often have timing issues that affect profitability metrics, and we understand that.

How much can I borrow?

Noble Funding provides $300,000 to $10 million in financing for qualified contractors.

How fast can I receive funds?

We can fund $2 to $3 million in 2-3 business days for qualified borrowers.

Do you require a personal guarantee?

Not always. Qualified borrowers can access Noble Funding’s capital without personal guarantees.

What government contracts do you finance?

We work with federal, state, and local contractors across various industries, including IT, professional services, construction, manufacturing, and healthcare.

Get Government Contract Financing from Noble Funding

Your government contract business deserves a financing partner who understands the unique challenges of working with government agencies.

Noble Funding advantages for government contractors:

• 20 years of experience financing contractors
• Over $1 billion funded nationwide
• A+ BBB rating with zero complaints
• Funding in days, not weeks
• $300,000 to $10 million available
• Works alongside your bank financing
• No personal guarantee options

Contact Noble Funding today to discuss how our government contract financing solutions can support your contracting business. Do not let cash flow constraints limit your ability to win and successfully expand your business.