Capitalism is a very unforgiving and demanding taskmaster indeed, and so a business that fails to maintain the highest standards of quality control, productivity and efficiency will ultimately fall by the wayside and find itself quickly rendered obsolete as a more competitive rival is able to produce an equivalent (or worse yet, higher) quality of service than the current trader.
Unfortunately, one of the major reasons that a business will quickly find itself in trouble is due to the fact that customers are an entirely unpredictable lot, and as such, this has serious problems to the ultimate cash flow of the business.
With limited cash flow, this will force the business to then proceed to cannibalize its working capital reserves in order to defray the expenses of things such as wages of the staff, rent, mortgage payments, purchase of stock and supplies.
Ultimately, the business will only be able to rely upon its working capital reserves for a limited period of time, and in short, the more that they have to expend on the settlement of debts such as those specified in the previous paragraph, the less money the business will have at its disposal to actually expand and grow.
The business could rely upon external sources of financial support, such as bank loans, over drafts or angel investors, although all of these methods will only ever benefit the lender far more than the borrower as the borrower is forced to be controlled by a variety of tightly enforced and defined rules.
This seems like a rather depressingly stark choice: either a business tries to survive on its own and flatly refuses the help of a commercial lender..
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or instead uses them and takes a gamble with the long term economic workability of the business as a whole.
Thankfully, there is an alternative option that is available to the average business owner, and perhaps best of all, the consumer can draw relief from the fact that it also happens to be one of the most accessible and easy to acquire forms of business financing around.
With factoring government receivables, the business owner who has acquired a contract with a government body will be able to use a factoring agency to provide them with a significant upfront deposit of the money that they require in as short a time as possible.
Therefore, all of the traditional problems and issues commonly associated with operating a government contract are neatly evaded.
With factoring government receivables, the fact that the client company is provided money upfront will help to ensure that the cash flow of the business is guaranteed to move smoothly and without hindrance.
Because of this, factoring government receivables can be an excellent strategy for overcoming the legal minefield that the government contract with milestone assessed performance contract clauses will often throw up in the path of the unsuspecting business owner.
The market for factoring government receivables is extremely competitive indeed, which in turn means that the business owner will be able to enjoy very generous savings on their fees.