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One of the most common challenges a Contractor or Subcontractor business in the construction field faces is maintaining cash flow. Yet most contractors’ / subcontractors’ construction businesses are subject to progress payments, meaning they generally do not begin to receive payments until 30, 60 or even 90 days into the project. The answer to contractors’ / subcontractors’ inevitable cash crunch is Construction Funding, which is quickly becoming the alternative financing method of choice throughout the construction industry.
Construction funding means a contractor / subcontractor sells their accounts receivable – whether they be invoices, progress billings, requisitions, or AIA’s – to a finance company (known as a Construction Factor) for a discount. The construction factor buys one or more of the business’s invoices, advancing cash to the business– typically 70%. Once the invoices are paid, the construction factor rebates the invoice balance to the contractor / subcontractor less the fee.
Contractors, subcontractors, suppliers, and every other small to medium size construction related business benefits from Construction Funding. Our Contractor / Subcontractor Construction Funding Program is specially designed to finance contracts with local, state, and federal government agencies. We work particularly well with programs designed at increasing contractor / subcontractor / vendor participation among:
- locally owned businesses
- minority owned businesses
- female owned businesses
- disadvantaged businesses
- small businesses
Construction related businesses can use funds available through construction funding to pay their workers, taxes, workers’ compensation, union dues, and insurance payments. Also, contractors / subcontractors can buy materials necessary to complete their jobs or start new construction projects. It helps construction businesses facing cash flow issues to survive and it helps construction businesses to grow by providing funds needed to go after new construction jobs and new markets. The continual rebuilding since the devastation of Hurricane Katrina is the perfect example.
- Speed: Contractors / Subcontractors in a cash crunch can receive funding in 24 hours.
- No Monthly Payments: Since the contractor / subcontractor does not borrow any money, they make no monthly payments.
- Continuous Cash Flow: Construction Funding provides businesses with cash whenever needed.
- Relies on the Financial Strength of Customers: Construction Funding provides funding based on the financial strength of a contractor’s / subcontractor’s customers, not on their construction business’s financial strength.
- Stimulating Growth Opportunities: Construction Funding offers businesses the chance to grow by providing contractors / subcontractors with access to funds they can use to bid on other construction jobs, get new customers, go into new markets, and increase their scope.
- Accessible to Unbankable Businesses: Any construction business with accounts receivable can qualify for funding through construction funding.
- It limits contractors’ / subcontractors’ flexibility.
- A lender secures assets equal to a minimum of three times the loan amount.
- Contractors / Subcontractors cannot secure additional funds without renegotiating the loan.
- Contractors / Subcontractors must meet monthly payment obligations.
- There is a loan liability on your balance sheet.
- Contractors / Subcontractors don’t borrow money.
- Contractors / Subcontractors make no monthly payments.
- Contractors / Subcontractors receive funds in 24 hours or less.
- Contractors / Subcontractors control their cash flow by determining how much they need.
- Contractors / Subcontractors increase availability of immediate cash enabling them to bid on more new construction jobs and earn additional supplier discounts.
Interested in a FREE No Obligation Consultation? Call Us at 561.735.0885 or Click Here for your Construction Funding request. Any and all information you submit will be held in strict confidence. One of our highly knowledgeable professionals will be pleased to show you how we can get you the Quick Cash that your business needs NOW!
We look forward to working with you!
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