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government contract financing is all too often the next subject that businesses worry about after they have won a big contract small and mid-sized businesses in particular finish celebrating a victory by wondering how they will pay for the supplies equipment or employees they suddenly require so what are the best ways to secure financing banks will happily loan money to government contractors who have an excellent credit history and a strong business record especially if they have collateral too however companies that do not have that type of record like small businesses working on their first government contract might not get a banks best terms also banks might not move quickly enough to suit the needs of contractors beyond typical bank loans or lines of credit lay several options called factor banking factoring differs from a loan in that the factoring company or factor takes possession of an asset rather than accepting it as collateral these include invoice factoring non-notificati