FACTORING FOR CONTRACTORS AND SUBCONTRACTORS
Construction companies and more particularly subcontractors often have cash flow problems due to slow payments. They have a continuing need for payroll, overhead and equipment cost. Small and new companies struggle to get paid in a timely fashion; however if you have cash flow problems factoring can be a godsend.
As a new or small company what are your options, bank loans are difficult for new companies and the paperwork can be overwhelming. A bank will need to see assets, good collateral, and a record of profitable operations before you have a chance of receiving a bank loan. With factoring, you don’t take on any debt. You simply get cash now while the factor waits on your payment.
With factoring, your credit is not the issue; it is your customer’s credit that the factor relies on for payment unlike a bank. You will continue to need cash to cover payroll, equipment charges etc. With factoring your company will have the necessary funds to continue business as usual and grow at the same time.
Don’t get caught having to wait up to 90 days for a bank loan to complete a job It is likely that your client will get someone else to finish the project and you may not get paid for the work completed and lose your good reputation. Factoring will get you money in a matter of days.
Starting a job with low cash flow can be dangerous. There always seems to be an extra expense and then you are in financial trouble and may not be able to complete the job, meet your payroll or equipment rental cost.
You can’t do your best for your client if your cash flow is late or slow. You must give your client your very best and you can’t if your cash flow is not meeting your needs. With factoring you will have the financial solutions to continue and grow your construction business.
Let’s talk and see if we can help with your cash flow.