The volatility of the construction industry creates risks for plumbing contractors and plumbing companies that are uncommon in other business sectors.
Plumbing companies usually must wait until months after the work completion of the job before receiving payment of what they are owed. This can place a tremendous strain on a company’s cash flow because employees, subcontractors and suppliers demand payment as the work is performed or upon delivery of the materials.
Small to medium-sized plumbing contractors do not have the luxury of the cash reserves of large plumbing companies nor do they have the opportunity to have multiple jobs going on at one time. A plumbing contractor must supply the labor and materials to complete each project. The cash outlays required for this can make it impossible for a plumbing company to bid on new construction jobs until payment is received from slow-to-pay completed projects.
As a plumbing contractor, you know that accounts receivables are useless to your company until your customers pay them. Plumbing company factoring converts your unpaid invoices into cash your business can use for such things as:
- Meeting payroll expenses
- Paying rent and other operating costs related to buildings and equipment
- Funding the cost of materials and supplies for current projects
- Having the funds available to bid on contracts for new projects
- Investing in growth opportunities requiring immediate access to capital
In the highly competitive construction industry, a plumbing contractor who is not in a position to bid on a job or accept a job that must be started immediately will lose the prospective customer to another plumbing contractor.
Factoring will give your plumbing company cash equal to a percentage of the value of your outstanding invoices. Factor Funding Co. takes on the task of collecting the invoice payment from the customer. When the customer finally pays your invoice, we deduct the amount that was advanced and a small fee. The balance of the payment is returned to you.
GET IN TOUCH WITH FACTOR FUNDING
What better way to finance your business than with an expert with decades of experience helping other plumbing company owners grow their businesses?
Running a business isn’t easy, and figuring out financing on your own is even harder. Waiting around won’t help you pay your expenses.
Reach out to our financing experts to chat about your financial needs and learn how we can partner with you to help you achieve your business goals. Here’s to your success!