Government Invoice Financing: Turn Your Federal Receivables into Working Capital

Government invoice financing converts your outstanding government invoices into immediate working capital. Instead of waiting 30, 60, or even 90 days for payment, you can access funds quickly and keep your business operating smoothly while your invoices work through the government payment process.

Noble Funding has provided working capital solutions to businesses with government receivables for over 20 years. With more than $1 billion funded, an A+ BBB rating, and zero complaints since 2005, we understand how to help contractors bridge the gap between invoicing and payment.

What Is Government Invoice Financing?

Government invoice financing allows you to borrow against or sell your outstanding invoices to government agencies. The concept is straightforward:

1. You perform work and invoice the government agency
2. Instead of waiting for payment, you access financing secured by those invoices
3. You receive capital immediately (minus fees)
4. When the government pays, the financing is settled

This approach works because government agencies are highly reliable payers. While they may be slow, they almost always pay their valid invoices. Lenders recognize this reliability and provide financing secured by these receivables.

Types of Government Invoice Financing

Invoice Factoring

• You sell your invoices to a factoring company
• The factor advances 80-90% of invoice value
• When the government pays, you receive the balance minus fees
• The government pays the factor directly

Accounts Receivable Financing

• You borrow against your invoices as collateral
• The government pays you directly
• You repay the financing from payments received
• You maintain control of customer relationships

Junior Capital Secured by Receivables

• Working capital loan that considers government receivables
• Not tied to specific invoices
• More flexible use of funds
• Subordinated to senior lenders

Why Government Invoice Financing Makes Sense

Government Payment Reality

Federal agencies are required to pay invoices within 30 days under the Prompt Payment Act, but reality often differs:

• Actual payment frequently takes 45-60 days
• Complex contracts may take 75-90 days
• Invoice rejections restart the payment clock
• Agency processing backlogs cause delays
• Year-end budget cycles can slow payments

State and local governments may take even longer, with some municipalities notorious for slow payment.

Cash Flow Timing Mismatch

While waiting for government payment, contractors must pay:

• Employees on regular payroll cycles
• Suppliers within their payment terms
• Subcontractors per contract requirements
• Operating expenses monthly
• Equipment and materials costs upfront

This timing mismatch creates cash flow pressure that government invoice financing solves.

Growth Capital Access

Growing contractors face even greater challenges:

• New contracts require upfront investment
• Multiple invoices outstanding simultaneously
• Retainage ties up 5-10% of each payment
• Scaling requires additional resources before revenue

Government invoice financing provides the capital to grow without waiting for payment cycles to catch up.

Noble Funding Approach to Government Receivables

While traditional invoice factoring sells individual invoices, Noble Funding provides junior capital solutions that consider your entire business, including government receivables. Here is how our approach differs:

Comprehensive Working Capital

Instead of advancing against individual invoices, we provide working capital that you can use for any business purpose. Your government receivables strengthen your overall financial position.

Fast Funding

Noble Funding can provide $2 to $3 million in just 2-3 business days. When you need capital to keep operations running, speed matters.

Substantial Amounts

We offer financing from $300,000 to $10 million, supporting significant working capital needs.

Works With Existing Financing

Our junior capital is fully subordinated to any bank or senior secured lender. If you have a bank line secured by receivables, we complement rather than compete with that financing.

Flexible Terms

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

No Personal Guarantee Options

Qualified borrowers can access our capital without putting personal assets at risk.

Clean Balance Sheet Option

Noble Funding can structure deals without UCC filings on corporate assets, maintaining flexibility.

EBITDA Flexibility

We work with companies that have positive or negative EBITDA. Timing issues from slow government payments often affect profitability metrics.

When to Consider Government Invoice Financing

Payment Delays Creating Pressure

If government payment delays are causing cash flow stress, invoice financing provides relief.

Growing Faster Than Cash Flow

When new contracts increase revenue but cash flow cannot keep pace, financing bridges the gap.

Seasonal Government Work

Contractors with seasonal government contracts may need financing to smooth cash flow throughout the year.

Multiple Contracts Outstanding

Managing cash flow across multiple contracts with different payment schedules requires working capital support.

New Contract Startup

Starting a new government contract requires investment before invoices are even submitted. Financing enables rapid mobilization.

Retainage Accumulating

As retainage builds across contracts, working capital becomes tied up. Financing replaces that capital.

Government Invoice Financing: Use Cases

Bridging Payment Delays

A professional services firm with $12 million in federal revenue experienced processing delays on several large invoices. They needed $800,000 to cover two payroll cycles while waiting for payment. Noble Funding provided bridge capital quickly.

Contract Ramp-Up Support

A systems integrator won a new $5 million contract requiring immediate staffing. They needed working capital to hire while existing receivables were still being processed. Junior capital enabled rapid contract startup.

Seasonal Cash Flow Smoothing

A facilities maintenance contractor had peak government work in summer months with winter lulls. They needed working capital to maintain operations year-round while receivables cycled through.

Growth Capital Acceleration

A defense contractor was growing 40% annually, outpacing their bank’s willingness to extend credit. Noble Funding’s junior capital, supported by strong government receivables, provided growth financing.

Payroll Coverage

A staffing contractor providing cleared personnel to federal agencies needed $1.5 million to cover payroll during a period of delayed payments. Invoice-backed financing kept employees paid.

Best Practices for Government Invoice Management

Submit Invoices Promptly

• Invoice as soon as you are eligible
• Do not batch invoices unnecessarily
• Meet all contract invoicing requirements
• Use electronic submission when available

Ensure Invoice Accuracy

• Match invoice format to contract requirements
• Include all required documentation
• Reference correct contract and task order numbers
• Verify amounts and descriptions

Track Invoice Status

• Monitor payment portals (WAWF, IPP)
• Follow up proactively on aging invoices
• Document all communications
• Escalate persistent delays appropriately

Maintain Clean Records

• Keep copies of all submitted invoices
• Document performance and delivery
• Save correspondence regarding invoices
• Prepare for audit or inquiry

Plan for the Cash Flow Gap

• Forecast receivables timing accurately
• Account for typical payment delays
• Build relationships with financing sources
• Have capital access before urgent needs arise

Qualifying for Government Invoice Financing

What Lenders Look For

Government Receivables Quality

• Agency creditworthiness (federal vs. state vs. local)
• Invoice age and status
• Contract terms and invoicing provisions
• Payment history with specific agencies

Business Fundamentals

• Overall revenue and stability
• Operating history
• Management experience
• Financial position

Contract Quality

• Contract type and terms
• Remaining contract value
• Performance track record
• Relationship with contracting officers

Noble Funding Requirements

We work with businesses that have:

• Annual revenue of $5 million to $150 million
• Government contracts producing receivables
• Established operating history
• Reasonable financial position (positive or negative EBITDA considered)

Frequently Asked Questions

How is government invoice financing different from regular factoring?

Government invoice financing specifically targets receivables from government agencies. The reliability of government payment makes these invoices particularly attractive to lenders.

Do I have to notify the government that I am financing my invoices?

It depends on the financing structure. Traditional factoring typically requires notification. Noble Funding’s junior capital approach generally does not require agency notification.

What types of government agencies qualify?

Federal agencies are most commonly financed. State and local government invoices may also qualify depending on the specific agency and jurisdiction.

How much can I borrow against government invoices?

Traditional factoring typically advances 80-90% of invoice value. Noble Funding provides $300,000 to $10 million based on your overall business, including government receivables.

What happens if the government rejects or disputes an invoice?

With traditional factoring, disputes affect your funding. With Noble Funding’s working capital approach, temporary invoice issues have less immediate impact since financing is not tied to specific invoices.

Is government invoice financing expensive?

Costs vary by product type. Traditional factoring has per-invoice fees. Noble Funding’s junior capital has fixed terms with known costs. The value of immediate capital often exceeds financing costs.

How fast can I access funds?

Noble Funding can provide funding in 2-3 business days for qualified borrowers.

Get Working Capital from Your Government Invoices

Your government invoices represent reliable future payments. Noble Funding helps you access that value now instead of waiting for government payment cycles.

Why businesses choose Noble Funding:

• 20 years of contractor financing experience
• 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 your government receivables can support the working capital your business needs. Do not let slow government payments constrain your operations and growth.