For small businesses, entering the world of government contracting can be a transformative experience, but it often requires navigating new challenges—especially when it comes to financing. A mattress manufacturer’s representative with over five years of experience found herself in this exact situation when she secured a $209,000 contract to supply mattresses to the U.S. Air Force across 15 locations.
This contract marked her first venture into government contracts, and while the opportunity was significant, the financial requirements posed a challenge. With a cost of goods totaling $130,000 and additional responsibilities, including recycling the old mattresses, she needed financial backing to proceed confidently.
When faced with an opportunity to grow your business, having a reliable financial partner like SouthStar Capital can make all the difference. With our support, businesses can confidently tackle new challenges, secure new contracts, and continue to grow.
Previously, she had primarily worked on a commission basis with commercial clients like Las Vegas casinos and resorts. However, this direct sale to the Air Force offered a much higher gross margin of 37.8%, compared to her usual 7% commission.
SouthStar Capital stepped in with a $500,000 Accounts Receivable (A/R) facility, enabling her to secure the necessary goods and begin operations without cash flow constraints. This support allowed her to transition from a commissioned sales representative to a successful distributor, significantly improving her revenue model and establishing herself as a reliable government contractor.
This success highlights the importance of seizing opportunities and the vital role of having the right financial partner. With SouthStar Capital’s support, she not only completed the contract but also established a solid foundation for future growth in the government contracting space.
Learn more on how to grow your business with SouthStar Capital.