Prime contractors would be remiss if not acknowledging the challenges a lack of access to working capital provides for their subcontractors. Partnering with alternative lenders like Parabilis who can provide solutions to cashflow shortfalls could mean the difference between maintaining top performing subs and having a revolving door of contribution to your contract work.
The Case for Small Business
Small to mid-sized businesses make up the biggest portion of our nation’s economy. They also serve to support government contracts on a larger scale than ever before with nearly 25% allocated to them from most federal agencies. Even though the opportunities are vast, the ability to perform and stay afloat is a challenge that many cannot overcome.
Recent studies have shown that 8(a) businesses, for instance, have a difficult time hurdling the five-year mark mostly due to cash flow issues that hit on the first award and follow them through many contract cycles before eventually making it impossible to bid again.
Access to Working Capital
The classic issue for these companies relates to a lack of working capital access and an understanding of the upfront costs that accrue before they get paid. There are many factors that contribute to the working capital shortfall that can be the demise of your business. It’s very hard these days to get a line of credit from the bank, even for the most successful government contractors in the market.
Lending restrictions have made it nearly impossible for a newer business to gain access, and even long-standing contracting businesses are getting the squeeze with tighter requirements from their banking partners. Lenders like Parabilis offer this market the ability to borrow even in the beginning stages of their business, allowing for the use of strategic debt to promote growth.
Prime contractors would be remiss if not addressing issues like this within their supply chain. Partnering with alternative lenders like Parabilis who can offer education to their subcontractors on the options available for working capital could mean the difference between maintaining top-performing subs and having a revolving door of contribution to your contract work.
Supporting Your Supply Chain
There are several options small businesses can utilize to create a strategy for their costs and expenses. Allowing capital providers and accounting experts to consult with your supply chain is a great way to support your preferred vendors. Virtual events and educational chats are easy to set up with providers, and subcontractors can access information for little to no cost.
Parabilis partners with CPA firms, banks, and other alternative lenders to provide a comprehensive overview of the options available so contractors can choose for themselves the best approach to their working capital issues. We provide straight-forward access by experts in accounting and lending so that businesses can get a grip on managing their cash flow.
Prime contractors are encouraged to contact us today to schedule a strategy session on how Parabilis can provide education and awareness for this vital portion of our economy. Don’t allow progress and innovation in technology and beyond to be stifled because these businesses don’t have access to the cash to keep them going and creating keeping us ahead of our enemies. We are ready to assist today!