Suite 1500 Greenwood Village, CO 80111ġ1601 Pellicano Dr., Ste. Oakbrook Terrace, IL 60181ġ333 Corporate Dr. Search Our List to Find Construction Factoring Companies Near You:ġ000 Mansell Exchange Building 300, Suite #340 Alpharetta, GA 30022ġ0320 Little Patuxent Pkwy Suite 200 Columbia, MD 21244ġ925 18th Avenue NE Suite #115 Calgary, AB T2E 7T8Ĩ307 University Executive Park Drive, Suite #250 Charlotte, NC 28262ġ7 W 415 Roosevelt Rd. Is Invoice Factoring a Good Option for Your Business?.Learn More About Construction Factoring Companies: Construction factoring companies collect the invoice on your behalf and as an added bonus, deal with the hassles and stress associated with collecting payment. To reduce your costs of construction factoring, choose the most recent invoice with the highest dollar value. With construction factoring, you can collect on 70-92% of the value of your invoice in a matter of 2-3 days in most cases. How does construction invoice factoring work? Construction factoring can allow your business to get on a regular cash flow cycle so you never have to be at risk of failing to meet payroll obligations. Covering the paychecks of union carpenters, welders, and plumbers doesn’t come cheap. Payroll is also a major expense for those in construction. Without proper equipment, your project can take longer than planned to complete, which generally costs you more money in terms of labor. Get the gear you need with construction equipment financingĬonstruction equipment financing can be used to cover the cost to purchase or lease new equipment, machinery, materials and other expenses so you don’t have to put your project on hold while you wait for money owed to you. In addition, construction factoring companies do not require your business to be “established.” There’s no minimum amount required to qualify for funding.
Newly launched businesses, subcontractors, and other small businesses can also qualify for funding via construction invoice factoring. They are able to work with mechanics liens and other barriers to obtaining capital. Moreover, reputable construction factoring companies, those familiar with the industry nuances, understand the restrictions and limits put on construction companies. As such, having sufficient cash flow and working capital on hand is necessary to complete one project phase and move to the next. That’s why many builders choose construction factoring as their financing option of choice over banks.Ĭonstruction invoice factoring companies are willing to take on the risk associated with the industry. Construction is a business with hefty expenses, including payroll, large equipment, materials, fees & permits, and more. Because it is a high risk, project-based business, many banks won’t offer to lend to builders, construction companies, contractors or others in the trades. Get in touch today.Obtaining capital can be tough for those in construction. Smart Factoring Quotes have lenders who can provide invoice finance facilities to construction contractors. Retentions at the end of the contract can also cause issues for invoice finance companies but these effect the prepayment level rather than the ability to provide funding.īad news for the construction contractor looking for a flexible working capital facility? Well, it is not all bad news. As such any invoice factoring company would not recover their position against these invoices. Should the contractor fail to complete the project then liquidated damages can come into effect which render the outstanding invoices worthless. The work done is usually measured weekly, monthly or against specific milestones and as such applications or invoices are raised for a part completed project. As such invoice factoring companies cannot take good title to the applications in the traditional manner. In the first instance most contractors within the construction industry raise ‘applications for payment’ rather than invoices.
With this in mind if you consider how the construction industry operates you will see how this can cause issues for invoice finance companies.
In the event of business failure they want to be able to approach the clients customer and request that the invoices they have taken good title to are paid in order to recover their position. Construction Factoring is challenging for invoice factoring companies for a number of reasons.Īny invoice factoring company wants to know that the value of any invoice that they have funded against is secure.
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