Government Factoring and the Federal Government Assignment of Claims Act (FACA)
Factoring and all its financial advantages aren’t limited to B2B and B2C transactions as it may also apply to government receivables. However, as beneficial as government factoring is, the paperwork needed to facilitate this type of factoring does not come without its own set of challenges.
Firstly, simply obtaining Federal Government Assignment of Claims Act (FACA) assignments or documents does not necessarily secure a lender’s interest in government receivables as they would need to properly accomplish a UCC-1 (Uniform Commercial Code) form to do this. After which, they would need to send a Notice of Assignment Form, four notarized originals with corporate seals, and other documents from the Federal Acquisitions Register (FAR).
Only until the government executes and returns this Notice of Assignment Form does the lender perfectly secure their financial right to the receivables. With that said, filling in the paperwork while navigating the nuances of the law can be challenging on its own. Factor in the necessary legwork for expired, terminated, and renewed contracts and it becomes downright difficult. This is why it can be easier to tap reputable factoring companies who have knowledge of the law and experience dealing with government entities if you want to avoid delays and inconveniences.
While government factoring provides contractors the money they need to keep their business running, it also protects lenders from fraud as it obligates the government to direct their payments to the entity identified in the FACA assignment. This means even if payment was mistakenly sent to the contractor, the lender retains their legal right to be paid by the government.
Here at J&D Financial, we are familiar with the procedural requirements of FACA, possessing extensive experience in funding government receivables. Gain all the benefits government factoring has to offer by simply complying with the legal requirements.
Aside from delays and inconveniences, other consequences the lack of funding can bring are shutting down your business indefinitely. If you cannot afford to pay for your high production costs, payroll, taxes, and other expenses, it means you might be missing opportunities for growth and expansion.
Partner with a factoring company that knows the ins and outs of the industry. We can advance up to 80% of your invoices once the Notice of Assignment has been accepted by the government agencies involved, and we’ll do so in the fastest and most convenient way possible.
For inquiries on your factoring eligibility or customer assistance regarding our government factoring service, please do not hesitate to contact us at 1-305-893-0300; we’d be glad to hear from you.