Why Progress Payments Don’t Preclude Invoice Loans

If you’re a small or medium-sized business owner working through government tenders, including infrastructure projects or defence contracts, you’re probably aware of the long payment periods many state, territory and federal governments adhere to. Payment periods of up to 30, 60 or 90 days are not uncommon, which can make it difficult for businesses to maintain their cash flow. Sometimes small businesses feel they don’t need to worry about cash flow when they negotiate tenders with progress payments. However, this is not always the case. Sadly, this is not always the case.

Looking Closer At Progress Payments

Progress payments are common in many government contracts, including in infrastructure projects and defence contracts. Essentially progress payments break a project up into deliverable milestones, with a portion of payment made for each item that is delivered. For small and medium businesses, there is often a feeling that having progress payments in government tenders will alleviate cash flow stress caused by long payment periods, but the opposite is often true. Even with progress payments, many government departments can take 30, 60 or even 90 days to pay out to contractors and subcontractors for their delivered milestones. So although you have delivered what is required as per your contract, the money may not be in your account for months, even if you need that money to deliver on the next part of the contract. This can put enormous stress on businesses who are struggling with cash flow, leaving them with no choice but to draw from their line of credit. As it happens, there is another potential solution for dealing with extended payment periods. That solution is invoice finance, sometimes called invoice loans.

Invoice Loans Can Be A Solution
If you’re at the helm of a small or medium-sized business, winning government tenders such as infrastructure projects or defence contracts can be an exciting and important milestone for your business. You are likely to also feel a sense of security if you have included progress payments in your negotiations. However, what happens when it takes months at a time for payments to clear from the departments?

Cash flow strain is what happens.
You can’t pay your employees, continue to do work on the infrastructure projects, defence contracts or other government tenders. The reputation of your company could be at stake, contractors may walk and you need cash to survive. This is where invoice finance comes in. Invoice finance allows you to borrow from a third party against your outstanding invoices. Apricity Finance can pay approved invoices quickly and with minimal fuss in most cases, often with no more collateral than the invoice itself. With invoice finance, small and medium-sized businesses can access the money that they need to maintain healthy cash flow in their companies, without exorbitant fees or high interest that is often found online of credit borrowing.

How find out more about Invoice Finance

For those involved in government tenders, infrastructure projects or defence contracts who rely upon progress payments, there’s never been a better time to explore your eligibility for invoice loans. Invoice finance is a simple solution to an all too common problem facing small and medium enterprise. With invoice loans, your company can still flourish and grow, even when you’re waiting on progress payments to clear on your projects. If you qualify, there’s no reason to let your business suffer through those long waiting times, stagnating your growth.
Get in touch with Apricity Finance today. Talk with a dedicated consultant, and explore how invoice finance might be able to help in reducing stress and cash flow concerns for your business.