G4i Capital Funding offers informative resources regarding factoring,
asset-based lending, loans, and other aspects of small business finance.
These resources are helpful to business owners and their professional advisors,
regardless of their financial status.
 

Investing in the Government Contractor Space All of the firms selected for G4iCFG’s investment portfolio are fully backed by a federal, state or municipal contract with the United States government as collateral. The U.S. Government (federal and local) is the world's largest purchaser, procuring more than $1 billion in goods and services from private entities every day and awarding more than $1 trillion in contracts annually. Currently, 23% of all government contracts are targeted as “set-asides” for small businesses, with a portion of that reserved for service-disabled veterans, social and economic minorities and businesses located in economically-challenged HUB Zones. Why Government Contractors? Even in today’s challenging economic environment, we believe companies represent a strong opportunity for equity investment. By investing in G4i portfolio firms, investors have the opportunity to own equity in companies with a built-in revenue engine and fully transparent operations. The loan is secured by a U.S. government contract.

Predictable Revenue – As clients, federal, state or municipal governments are a source of steady revenue, reliably paying every 30 days. Stable Cash Flows – Government contractors usually work from one, five or twenty year contracts, generating consistent cash flows over that time period. Dependability - Government contractors are often later stage firms positioned in established, mature industries and with documented track records. Credibility – The government is a discriminating buyer, fully vetting companies competing for an award and often requiring them to provide years of audited financial records. This added credibility is a competitive advantage to winning additional high-margin contracts in the private sector.

Why Now? The current administration has earmarked $787 billion in economic stimulus funds, flooding local and state governments and federal agencies with unprecedented new capital over the next half-decade. This opens up tremendous opportunities for existing government contractors and those interested in entering the space. For small businesses, where G4i CF focuses most of its attention, there are even greater opportunities. President Obama has continually pledged his support for small businesses, endorsing contract reform that will divert more government business to them, especially those with 8(a) or HUB Zone designations. A recent article in The Washington Post claims that the amount of government contracts won by small businesses in the D.C. area hovered at roughly 18 percent in 2008, a decline from 23 percent the year before and well below the state’s goal of 30 percent. The article further states that “the opportunities for small businesses in the government contracting space are and will remain significant. If the percent of contracts small businesses are receiving does meet the new goal, it would amount to a more than 65 percent increase in the number of contracts going to smaller businesses” in that area alone (Tinsley, Michael. “Obama, Government Contractors and the DC Region.”  The Washington Post. 5 Nov. 2008) Michael Tinsley, November 5, 2008).