Another funding option for established contractors with good credit and a successful track record is to gain pre-approval for a Working Line of Credit that can be utilized on an as-needed basis to fund general operational, staffing, equipment and sub-contractor costs in support of the federal contract. IBC offers an unsecured, $500k to $100k, 10-year business project term loan featuring no personal guarantee, interest rates from 2% to 6%, interest-only payments and no pre-payment penalty. Approval is based on the project’s merits not your credit score. A government contractor can use these “as-neeed” funds for any business purpose.

A working capital loan (or line of credit) is a generic term used to describe financing offered to a business for the purpose of covering day-to-day operating expenses. These are normally shorter term loans secured by a lien against business assets, but can also be unsecured. Working capital loans are frequently used for cash flow shortages caused by unanticipated expenses or by “seasonal” businesses to cover expenses in their slow period.

Lines of Credit come in different varieties but usually is a short-term “revolving credit” instrument issued by a bank or other non-bank financial institutions. The term “revolving” indicates that the business has an established credit limit that it can use repeatedly. The business can draw money off that credit line to cover expenses but must repay some, or all of the amount borrowed each month in order to keep the line open. Credit lines can be secured by a lien against business assets, real estate or even unsecured depending on the overall strength of the business. This type of financing is sometimes called a “credit line”, “bank line” or a “revolver”.