Case Study: How GovCon Financing Powered an IT Services Firm's Growth

A small federal IT services firm had landed its first sizable task order under an IDIQ — managed network support for a civilian agency. The work was profitable on paper, but the agency paid on Net-60 terms. Meanwhile, the firm had to onboard engineers, cover certifications, and run payroll every two weeks from day one.

When the agency offered additional task orders, the owner faced a painful choice: turn down growth, or staff up against invoices that wouldn't be paid for two months. A traditional bank line was capped by the company's thin balance sheet and would take weeks to expand — too slow for the hiring deadline.

The firm set up an invoice factoring line with Encore. Because underwriting focused on the federal government's creditworthiness rather than the company's short balance sheet, approval came within 48 hours.

From then on, each approved invoice was advanced up to 90% of its value — often within a couple of business days of submission. The firm got cash to onboard engineers and make payroll immediately, and the advance simply settled when the agency paid 60 days later. No fixed monthly payment, no new debt on the books, no dilution.

With receivables converted to working capital on demand, the firm accepted the additional task orders instead of passing on them. Over the following year it scaled from a single task order to five under the same vehicle, growing headcount in step with the pipeline.

Crucially, the factoring line grew automatically as invoice volume grew — there was no need to re-apply for a higher credit limit each time a new order landed. The owner could say "yes" to growth with confidence that payroll would always be covered.