Case Study: A Small Business Funding Its First Prime Award
A representative example of how a small business performed its first federal prime contract after being turned down for a bank loan — by financing its receivables instead.
Illustrative example. Figures are representative and not tied to a specific named client.
The challenge
A small business won its first prime contract with a federal agency — a milestone, but also a cash-flow cliff. The company needed working capital to staff up and operate, but the agency paid on Net-30 terms that, in practice, stretched longer.
The owner approached a bank for a loan and was declined: the business was young, its balance sheet was thin, and banks underwrite on exactly those factors. The contract that should have launched the company was about to become the thing that broke it.
The solution
The business turned to invoice factoring with Encore. Rather than evaluating the young company's credit, Encore underwrote the creditworthiness of the federal government as the payer — so the very thing the bank held against the firm (its newness) wasn't a barrier.
Each approved invoice was advanced up to 90% the same or next day, giving the owner steady cash to make payroll and cover operations while the agency took its time to pay. It wasn't a loan, so no debt hit the books and no personal guarantee tied up the owner's assets.
The result
The small business delivered its first prime contract successfully, building the past performance it needed to compete for more federal work — all without taking on a dollar of debt.
The factoring line scaled as the company invoiced more, turning a near-miss into a foundation for growth. The owner kept full ownership and a clean balance sheet heading into the next bid.
Facing the same cash-flow gap?
Encore advances 80 to 90% of approved invoice value. Once your account is active, each invoice is funded the same or next day. Apply in minutes.