Government contract factoring advances 85-95% of approved invoices within 24 hours under the Federal Assignment of Claims Act. Because the debtor is a government entity with virtually zero default risk, factoring rates are the lowest available — typically 1-3% per invoice. The Assignment of Claims process routes government payments directly to the factoring company, and the remaining balance (minus fees) is released to you upon payment. This works for federal, state, and municipal contracts.
Written by Ed Freeman, Capital Advisory — PeerSense
Government contractors: get 85-95% of your federal and state contract invoices funded within 24 hours. Lowest factoring rates (1-3%) backed by the full faith and credit of the U.S. government.
Minimum 30-35% equity required. Federal, state, and municipal contractors with active contracts and $25K+ monthly receivables.
LTV Target
85-95% advance rate
Est. Rate Range
1% - 3% per invoice
Term
Per invoice (30-90 day government payment terms)
Recourse
Non-recourse (government debtor)
DSCR
N/A — government credit backing
Closing Speed
24 hours — funded same day after setup
Min Loan Size
$10K
Loan Products
Government Contract Factoring, Assignment of Claims Financing
Government contract factoring is critical when you've won a contract that's larger than your cash reserves can support. The 30-90 day government payment cycle creates a massive cash flow gap — you need to pay subcontractors, buy materials, and cover payroll today while waiting months for government payment. Factoring bridges this gap at the lowest rates in the industry because government receivables carry essentially zero credit risk.
If your government contracts are primarily construction/infrastructure projects
Learn moreIf you provide staffing services to government agencies
Learn moreIf you have 2+ years of financials and prefer a revolving facility
Learn morePeerSense pre-underwrites every deal before presenting it to our institutional capital sources. With 500+ lender relationships and live market rate intelligence, we match your government contracting deal with the right capital source — right now.
No upfront retainer · Fee at closing only · Complimentary initial consultation
Written by Ed Freeman, Capital Advisory — PeerSense. Updated March 2026.
Disclaimer: The information on this page is provided for educational purposes only and does not constitute financial, legal, or investment advice. Rates, terms, and availability are subject to change based on market conditions, property characteristics, and borrower qualifications. The rate ranges cited reflect approximate market pricing as of March 2026 and may not reflect current conditions at the time of reading. PeerSense is a capital advisory firm, not a lender. We do not originate, fund, or service loans. All financing is provided by third-party lenders subject to their own underwriting criteria and approval processes. Borrowers should consult with qualified financial and legal professionals before making any financing decisions.