The common denominator in contracting within all industries is a shortage of working capital. Government contractors face a unique issue given that the opportunity to grow and earn contracts is vast when there is stability of the agencies you are seeking to do business within, however, the process of getting paid causes a lull in your ability to get jump started from day one forward. Point in case is especially daunting for the small to mid-sized GovCon. With the 25% small business set aside allocated within government contracts, these businesses have the ability to gain contract work at a greater rate than ever before. But staying afloat to make it through and bid another day is key. With payment remittance being net 60 at best and usually far beyond, many of these smaller contractors find it nearly impossible to stay on top of their operating expenses. Asset based lending (ABL) provides the type of cash flow relief for a business working to achieve the level of financial wellness that allows for the more traditional banking relationships. But traditional lines of credit with a bank are hard to come by these days without impeccable credit, several years proof of profit, and a high level demonstration of past performance.
The SMBs within GovCon are constantly working on breaking barriers on technological advancements and techniques that can solve the problems posed within, namely, our Defense industry. So while they are rewarded for ingenuity with contract approval, they are lacking the ACCESS to adequate forms of financing to bring to life the fruits of their labor. But don’t get me wrong, there are many options. But you need a Ph.D in finance in order to truly understand what you are getting and how and if it is the best option for your needs.
In some cases the government offers loans through the SBA, but there is a lot of red tape to jump through to qualify. Whether a Microloan or 504 loan, the requirements can eliminate the best qualified businesses for the job. Another option is through your bank, but again, as described above, the chances of an emerging small business getting a banking line of credit is as low as snowfall in Miami in June. The alternative options available from there have traditionally been invoice factoring and P.O. financing, and neither are flexible or affordable for this market. So what to do? I’m glad you asked!
Parabilis was established by former Federal contractors and Veterans who understand this problem from personal experience. Having founded Parabilis for precisely this reason: to give government contractors access to working capital without the need of selling off assets or paying exorbitant fees that they weren’t aware were included. Parabilis offers straightforward ACCESS to capital without EXCESS in fees or stipulations. While merchant cash advances and factoring companies provide upfront capital to fund your growth, their costs are excessive and the profits from your growth are realized by them and not you.
The basic differentiator is that you won’t need a Ph.D in finance to understand the process with our line of credit. There will be no hidden fees, small print requirements, smoking mirrors, only transparent and honest options for your working capital needs. We don’t seek business relationships in every industry. We are experts in government contracting acquisition and we understand what the access to working capital can do for your positive momentum and growth. Visit our website to learn more about our service, and reach out today for a consultation on how we can help your company!