Federal and state agencies pay in 30-90 days - but payroll, materials, and mobilization are due now. This guide explains the financing options built for exactly that gap, lists real lenders who work with government contractors, and covers investment-property financing - DSCR, fix-and-flip, and bridge loans - for the contractor-investors who straddle both worlds.
Each option trades cost against speed and paperwork. Most small government contractors end up combining two.
You sell an unpaid government invoice to a factor. They advance roughly 80-90% within days and collect from the agency under the Assignment of Claims Act. Cost: typically 1-3% per 30 days. Best when you have delivered and billed, and the wait is the only problem.
A lender funds the startup costs of a newly awarded contract - hiring, equipment, materials - before you can invoice anything. Underwritten against the contract itself, not your balance sheet. Costs more than factoring; exists because banks will not touch pre-revenue contract work.
The SBA 7(a) and CAPLines programs guarantee bank loans for working capital, including contract-specific lines of credit. Lowest rates of any option here, but expect weeks of underwriting and real paperwork. The right move before you are desperate, not after.
For contracts where you must buy goods to deliver: a financer pays your supplier directly against the government purchase order, then collects when the agency pays. Common for product resellers and manufacturers selling to agencies.
Many government contractors put contract profits into rental property. These are the three loan types built for investors rather than homeowners. Get-matched requests on this lane are reviewed and fulfilled by a licensed real estate broker and loan lender we work with directly - one professional relationship, not a network.
Debt-service-coverage-ratio loans qualify on the property's rent, not your W-2 or tax returns. If the rent covers roughly 1.0-1.25x the payment, the deal can work - useful for contractors whose write-offs make their taxable income look thin. Expect 20-25% down and rates above conventional mortgages.
Short-term purchase-plus-rehab financing, usually 6-18 months, sized on the after-repair value (ARV). Expensive money - points plus double-digit rates are normal - but fast, and the loan is built to be paid off at sale. The math lives or dies on your rehab budget and timeline.
Short-term financing to close quickly on a property before longer-term financing or a sale catches up - auction purchases, distressed sellers, or unlocking equity from one property to buy the next. Priced for speed; have the exit planned before you sign.
These are business-purpose loans for investment property, not consumer mortgages. Terms vary widely by lender and deal - verify everything in writing before paying any fee.
Real companies that publicly state they finance government contractors. Compiled from their public sites (September 2026). We are not a lender or broker; listing is not endorsement; terms change - verify with the lender.
| Lender | What they offer | Site |
|---|---|---|
| Encore Funding Mobilization funding, invoice factoring | Funding specifically for government contracts, including mobilization costs before first invoice. | encoregov.com |
| Porter Capital Government invoice factoring | Factoring for federal and state receivables, advances on government invoices. | portercap.com |
| SouthStar Capital Mobilization funding, factoring | Mobilization funding solutions and receivables finance for contractors. | southstarcapital.com |
| Invoice Factoring Guide (IFXG) Federal & state invoice funding | Government contract financing across federal and state receivables. | ifxi.com |
| Flexent Receivables finance | Factoring for federal and state receivables with flexible facilities. | flexent.com |
| Business Factors & Finance Gov contract factoring | Contract financing and factoring for government suppliers. | businessfactors.com |
| GillmanBagley Capital solutions | Working-capital solutions aimed at government contractors. | gillmanbagley.com |
| GovCon Funding Contract financing | Financing products built around government contract awards. | gbgovconfunding.com |
| U.S. Small Business Administration 7(a) loans, CAPLines | Government-guaranteed working-capital loans and contract lines of credit through participating banks. Start here if you have weeks, not days. | sba.gov |
Assignment of Claims: financing against a federal contract usually requires the assignment to be filed under the Assignment of Claims Act (31 U.S.C. 3727). Any lender above will handle the filing; if one says it is not needed for a federal invoice, walk away.
Answer a few questions. Your email client opens with a prefilled message straight to our desk. Real-estate requests are reviewed and fulfilled by a licensed real estate broker and loan lender we work with directly; gov-contract requests get pointed at the option that fits from the directory above. No accounts, no list-selling.
Primarily the government's. Factors underwrite the obligor - the federal government is effectively the best debtor in the market, which is why new and thin-file contractors can get funded when banks say no.
Commonly 1-3% of the invoice per 30 days, sometimes flat-fee for short turns. A 2% fee on a $100k invoice paid in 30 days costs $2,000. Compare that against missing payroll or passing on the next bid.
Sometimes. It depends on the prime's credit and whether the prime will acknowledge the assignment. Fewer lenders play here; expect more questions.
eLoanPoint itself is not a lender and does not make loans. Educational content and the lender directory are public information. Get-matched requests on the real estate lane are reviewed and fulfilled by a licensed real estate broker and loan lender we work with directly; we will say plainly on this page if compensation terms are ever part of that relationship.
Most DSCR lenders look for mid-600s and up, with better pricing above 700. The bigger levers are the down payment and the coverage ratio: more down and a higher ratio buy you a better rate.