Bankers Factoring (2024)

Get Help Securing Government Contracts with a Financial Capability Letter

Be a Stronger Government Supplier in Your Buyer’s Eyes with a Comfort Letter

Can Start-Ups Obtain a Letter of Comfort?

Large companies and government buyers want to help MBEs, veteran-owned businesses, WBEs, and other undercapitalized suppliers. Bankers Factoring has a letter of financial capability or letter of comfort program to help buyers feel more at ease with the new and growing suppliers they want to do business with.As part of the government buyer’s due diligence, federal agencies may authorize purchase orders based on a financial capability letter or comfort letter for disadvantaged businesses. Comfort letters do just that, give your large government or Fortune 1000 customers comfort that you have the financial wherewithal to perform on a contract.

We will explain to your government customers how factoring works and gives you unlimited working capital based on the invoices you generate.

Obtaining the letter helps our client’s businesses gain trust and prove creditworthiness in the eyes of buyers they hope to become a solid vendor. The letter includes a declaration of holding and awareness, a disclaimer, and credit service details. Even though it confirms our clients’ factoring facility with us before they enter into a transaction, it does not guarantee payments or repayments.

You can also read what is government factor financing and how a comfort letter can help you stand out.

It Is Proof You Have the Financial Resources to Execute on a Government Contract

You’ve got a great idea, the funding is there, and you’re ready to build your product or service. But what if there’s one more hurdle that you need to clear up before all of this can go forward? You may need a letter of comfort or a letter of financial capability. These two documents are the same: they prove that your business has the financial resources to successfully execute a contract if it wins it with a particular buyer.

Factoring government receivables helps contractors stay afloat during contracts. However, many businesses fail to obtain government contract factoring. A letter of financial comfort strengthens your ability to obtain contracts from the federal government.

No hard credit report is needed to demonstrate your financial resources. Free credit reports or soft pulls help Bankers Factoring send certified letters of comfort to government agencies. We help small businesses and contractors secure working capital and demonstrate to their customers their available resources via a comfort letter.

Government Factoring is a fast way to sell your unpaid government receivables for an initial 80 to 93% cash advance. Complete an encrypted application to begin obtaining your letter of financial capability.A comfort letter can be the best financial information on a startup or new government contracting business.

What Is a Letter of Comfort?

A letter of comfort is a document used by factoring companies, banks, lenders, and other financial institutions. This letter, also known as a letter of financial capability or LFC, will verify that a company has the financial capacity to manage a project or contract.

An LFC informs your customers about your ability to handle the financial obligations of your contracts. A letter of comfort provides your customer peace of mind about your working capital to fund operations.

Government contract payroll financing is a major expense for contractors, and agencies use the LFC or comfort letter to assess your funding.

What Is a Letter of Financial Capability?

A letter of financial capability or comfort letter is a document that demonstrates your business’s ability to pay its people and bills and execute well. The contract that you expect to win will be attached to this letter. Additionally, this document strengthens your ability to acquire government contract financing solutions. A government agency likes to see a letter of comfort for its contractors.

A letter of financial capability should include the amount of credit or access to funding your company has and for how long. Federal Acquisition Regulations (FAR) provide small business government contract framework. The government wants you to demonstrate your fiscal position without viewing your financial statements.

Who writes this letter?

A bank or financial institution, like Bankers Factoring, will write a letter of financial capability or comfort. It should come from a senior manager and be written on the lender’s letterhead. The company’s name and contact details should also be included in this section, along with a statement of financial capability via comfort letters.

Letter of Comfort for Government Contractors

A letter of comfort is an assurance from a third party that the contractor can perform the work it has been contracted to do. Bankers Factoring offers a special program for government factoring services and issues financial capability letters for our clients.

Instead of running a credit report, a certified comfort letter from Bankers Factoring can help you secure more government awards. It is essential for contractors to have the resources to perform paid work with tax dollars. Government projects had strict regulations to protect taxpayer dollars.

Some main requirements for a letter of comfort include the following:

• Official letterhead of the lending institution or factoring company
• The type of financing program, FYI Government Invoice Contract Factoring
• A description of the finance transactions
• Amount of funding available
• General statement exhibiting support for contractor financial obligations
• A senior ranking official should sign the comfort letter

See our related article: Government Contract Factoring Guide

Bankers Factoring Government Contractor Financing

Our third-party comfort letter is a statement that certifies your financial capacity via your invoice factoring facility with us. A comfort letter can also help mitigate your credit score when it comes to contract terms.

Bankers Factoring government contractors’ factoring is a form of asset-based funding that can provide your customers with financial capability letters so you can win more government purchase order awards.

The use of Bankers Factoring government contractors’ financing has grown in popularity since its creation in the 1990s. The reason behind this trend is simple: Bankers providing letters of comfort provide many benefits to government agencies, large corporate buyers, and minority contractors alike.

Ready for the owner-employees of Bankers Factoring to grow your business with our award-winning receivable factor financing, including bad debt protection? Use our fast online factoring application or call 866-598-4295.

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