can AR be factored if the customer is a government?
Would you please advice on the following:
Parent company wants to factor its sub AR. 99% of sub’s customers are government agencies. Can the parent company do factoring on government AR? I searched the web and couldn’t get a clear answer. Thank you in advance!
Great question. The short answer is yes, you can factor your accounts receivable from the government. However, I believe that in this specific case, the subsidiary would have to be the one engaging a factoring company and enacting the factoring itself. Still, since the parent owns the subsidiary, the end result would be the same.
For more information, check out these specific articles on factoring government receivables: How To Factor Your Government Contract Receivables, government factoring.
We also have 3 detailed articles on invoice factoring in general, which you can find below:
Hope this helps!