SouthStar Capital Provides $250,000 PO and A/R Facility to Support Government Contractor’s Federal Supply Project 

Accounts Receivable Financing, Blog, Case Study, Construction, Government Contractors, Purchase Order Financing

government contractor blog

The Situation

A North Carolina-based government contractor specializing in the supply of medical products, pharmaceuticals, laboratory equipment, and EV infrastructure was awarded a contract to provide equipment at a U.S. Customs and Border Patrol facility. 

Despite securing the purchase order and having a reputable supplier, the company faced a significant funding gap. The supplier required 50% payment upfront and 50% prior to shipment, while the government agency’s payment terms were Net 30 following installation and approval. This timing mismatch created a cash flow bottleneck, risking delays on the project and straining the company’s early-stage growth within the Government Contracting space. 

Traditional financing options weren’t viable due to the short-term nature of the contract and the company’s limited operating history, prompting them to seek a more flexible, government-focused financing solution. 

The Solution

SouthStar Capital structured a $250,000 Purchase Order and Accounts Receivable Facility designed to provide the immediate working capital needed to fulfill the government contract. 

Through this combined solution, SouthStar advanced funds to cover supplier payments, allowing the contractor to meet payment requirements and ensure on-time shipment of the equipment. Once the products were delivered, installed, and invoiced to the government agency, SouthStar factored the receivable, paying off the purchase order balance and advancing additional liquidity to the client. 

This tailored structure provided a seamless financing bridge from purchase order to invoice payment, enabling the company to focus on performance and execution rather than cash flow timing. 

The Result

With SouthStar’s support, the company successfully fulfilled its government contract without delay, maintaining credibility with both the supplier and the U.S. Customs and Border Patrol. 

The immediate access to capital allowed the business to complete delivery ahead of schedule and position itself for future federal contracting opportunities. The partnership also strengthened the company’s financial foundation, giving it the confidence to pursue larger, more complex bids in the government procurement space. 

SouthStar Capital’s flexible PO and A/R financing solution not only supported successful project completion but also empowered this early-stage contractor to establish momentum in the competitive government contracting market.