The government payment problem (even without shutdowns)
Under normal circumstances, federal contractors already navigate extended payment timelines. The Prompt Payment Act requires federal agencies to pay within 30 days of receiving a proper invoice, but the reality is often longer. Between invoice submission, review cycles, and agency processing times, many contractors experience 45-60 day payment windows as standard practice.
Government shutdowns amplify this challenge exponentially. When agencies cease non-essential operations, payment processing stops entirely. Invoices that were weeks away from payment get frozen. New invoices can’t be submitted or processed. And critically, there’s no certainty about when normal operations will resume. The 2018-2019 shutdown lasted 35 days, but contractors had no way to plan for that duration when it began.
The cascading impact on your business
For government contractors, shutdown-related payment delays create pressure that radiates throughout your business:
Payroll obligations continue. Your skilled workforce (the engineers, analysts, and specialists who deliver on government contracts) still needs to be paid. Unlike federal employees who receive back pay after shutdowns end, your team depends on your cash flow to meet their own financial obligations.
You can’t simply pause operations. Government contracts often require maintaining readiness or continuing certain essential work even during shutdowns. And strategically, you can’t afford to lose the specialized talent you’ve spent years recruiting and developing.
Supplier and vendor payments don’t stop. Your own accounts payable, from subcontractors to insurance to facility costs, continue on their normal schedules regardless of when government payments arrive.
Growth opportunities require cash. Even during a shutdown, you may be positioning for new contracts, investing in capabilities, or maintaining business development efforts that require working capital.
The result is a cash flow squeeze that feels like being caught between two immovable forces: obligations that must be met and revenue that’s frozen in place.
A third option beyond waiting or borrowing
Traditionally, contractors facing payment delays had two options: wait it out (if cash reserves allowed) or take on debt through lines of credit or loans. Both approaches have significant downsides.
Waiting depletes reserves and creates stress throughout your organization. Taking on debt means interest costs, repayment obligations, and balance sheet impact that affects your financial ratios and future borrowing capacity.
Revenue On Demand offers a different approach. Rather than borrowing against future revenue or waiting for government payments, you can convert your outstanding invoices into immediate cash flow. Here’s how it works:
When you have an invoice that won’t be paid for 30, 60, or 90 days (whether due to normal government payment cycles or shutdown-related delays), you can choose to receive payment from Now immediately. Your government client still pays on the original terms, but you get the cash you need when you need it. This isn’t a loan, so there’s no interest and no debt added to your balance sheet. You simply pay a flat fee (starting at 2.75% for 30-day terms) for the acceleration of payment. You stay in control, choosing which invoices to accelerate and when, with no long-term commitments.
Questions about how this works for federal contractors?
What government contractors should do right away
If you’re navigating the current shutdown or preparing for future payment disruptions, consider these steps:
Assess your cash runway. Calculate how long your current reserves can sustain payroll and essential operations without incoming government payments. This gives you a clear picture of your vulnerability window.
Identify your most critical invoices. Not every invoice needs to be accelerated. Focus on the receivables that would provide the most immediate relief for your highest-priority obligations.
Evaluate the true cost of your options. Compare the flat fee for Revenue On Demand against the interest costs of a line of credit, the opportunity cost of depleted reserves, or the business impact of delayed payments to your own team and suppliers.
Plan for the next disruption. Shutdowns are a recurring reality of government contracting. Building cash flow flexibility into your financial strategy means you’re prepared rather than reactive when the next funding lapse occurs.
Moving forward with confidence
Government contracting offers tremendous opportunities: stable clients, meaningful work, and the chance to contribute to important missions. But the payment dynamics require financial strategies that match the reality of how government agencies operate.
Revenue On Demand was built for businesses like yours: B2B companies with solid customers and good invoices who need cash flow flexibility without taking on debt. Whether you’re managing through the current shutdown or planning for future resilience, you have options beyond waiting or borrowing.
Your government invoices have value today
If you’re a federal contractor navigating payment delays, talk to a Now specialist about turning your outstanding invoices into immediate cash flow.