Construction Factoring

Construction

Business owners in the construction industry rarely ever receive payments from their customers on time. If this situation is affecting your business, construction factoring can help. This arrangement, which is designed specifically for construction companies, allows you to receive most of your invoice value right away rather than waiting as much as two months to be paid. Construction factoring is available for businesses of all sizes, from the small contractor to the multi-million dollar commercial contractor.

Who Can Benefit

The nature of the construction business often means that companies in this industry face periods where managing financial obligations becomes challenging. Typically, clients are billed after the completion of a project. However, it’s not uncommon for invoices to remain unsettled for 30 to 60 days or even longer. Such delays can put a strain on a construction company’s finances, making it challenging to manage:

• Small businesses with a less-than-perfect credit history that might have been turned down for traditional bank loans can still qualify for factoring.
• Companies that experience fluctuating profit margins, especially during off-peak seasons, can utilize construction factoring to navigate through leaner times.
• Start-ups or newer companies that haven’t yet established a credit line with conventional lenders can benefit from factoring, as the business owners aren’t subjected to rigorous credit checks.

If your company falls into one of these categories, construction factoring may be of particular help to you.

Why Use Construction Factoring?

Construction businesses often run into cash flow problems when customers don’t pay their invoices on time. Just one late payment can cause you to miss payroll, skip a utility payment or postpone a necessary purchase. For many businesses these vital expenses cannot wait. You can use construction factoring to advance the cash you need to continue operating your business without interruption.