What is the customary progress payment rate for small businesses?

The customary progress payment rate for small businesses is typically set at 85%. This rate is established to aid small businesses in managing their cash flow while meeting the demands of federal contracts. The progress payment rate allows small businesses to receive payments based on the amount of work completed rather than waiting until the entire project is finished.

Utilizing an 85% rate encourages small businesses to take on federal contracts by providing them with a greater degree of financial support during the contract period. This helps to promote the federal government’s goal of supporting small business participation in government contracting.

The other rates, while they may reflect some payment practices in different contexts or industries, do not align with the standard rate recognized for small businesses engaged in federal contracts. This is grounded in policies aimed at fostering small business growth and sustaining their operations through more accessible financing.