Alternative Finance
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The government contract is going to attract more contracts which will be essential in establishing the company in the contract industry. The company can use the government contract to attract ore clients who will in turn pay for the services that they require beforehand. Through this strategy, the company will be able to raise the funds required and t deal with the negative cash flow form the government contract. To minimize the negative cash flow, it is critical to ensure that the contracts that are going to be taken by the company from other clients than the government also have a higher profit markup which will help the business in staying afloat for a longer period.
The business can also use the contract by the government to secure funds to the project through secured financing by leveraging the revenue that the company is going to get from the government contract. This strategy will help in dealing with negative cash flow and also to keep the business afloat as it will have the right cash flow to spend on various expenses which will help the organization to continue with its operations.
The company as it will gain business with private companies can ask them to offer it more contracts which will lead to the company staying afloat while the company can also approach contractors who are subcontracting’s and ensure that they are funding the project first before taking up the subcontracts. This will help the company with staying afloat through the six months that the government contract is going to take. The government is notorious for deployment in paying for invoices and the company can use this invoices to acquire lines of credit which will help it to finance various aspects of its operations.