Construction Factoring

Construction companies are known to always be waiting on payments. Slow paying jobs result in a trickle-down effect which can adversely affect both general contractors and subcontractors. Even when customers pay on time it is usually close to 90 days of cash outlay before a first invoice is paid on a construction job. During this time period construction companies are responsible to pay for engineering, materials, labor, insurance, and other operating expenses. This is where construction factoring plays a beneficial role. It allows you to receive payments on invoices without having to wait the 30, 60, or 90 days.Construction factoring financing gives customers a chance to access a portion of their invoice values for a cost. Buying outstanding invoices for a discounted price and then taking over collections is what construction factoring companies do. In our factoring programs, we can help with mobilization funding, paying suppliers early and receiving discounts, and for payroll.

For larger and more established general contractors our program can be used as an alternative to bonding. This allows for general contractors to use the subs they choose, regardless of their ability to secure a bond and their credit worthiness. With our contractor factoring program vendors and suppliers are paid within 1-2 days of receiving an approved pay application. For small general contractors, our construction factoring financing assists in bidding for larger jobs, with working capital advances along the way. Similar to large general contractors, our program enables on time payments to subcontractors, suppliers, and vendors. Some of the services that are included in our program are the following.

• Lien Waiver Collection
• Insurance Premium Payments
• Union Dues
• Vendor, Supplier, and Subcontractor Payments
• Payroll Funding
• Monitoring Credit of Subcontractors

Subcontractors are burdened with the need to take a multitude of risks on construction projects. Outside of having to perform on the contract, manage payroll and operational expenses, subcontractors also have to extend credit to general contractors. Subcontractors are typically the smaller companies on a job site and interestingly enough, they are responsible for the most financial risk. On average subcontractors have to wait 50+ days to receive payments on monthly progress bills. Our subcontractor factoring program reduces the exposure down to just one billing cycle, from the normal 2 to 3 billing cycles subcontractors normally wait. As a subcontractor, you can choose which projects, and which invoices you want to finance and once you use our subcontractor factoring program you can be funded in just 24 hours of invoicing. Factoring provides support for subcontractors to bid on new projects, take advantage of supplier and vendor discounts, and mitigate financial risk on projects.

• Payroll Funding
• Working Capital for Operating Expenses
• Credit Reference Letters
• Mobilization Funding
• Insurance Premium Payments
• Payments of Union Dues
• Supplier and Vendor Credit Lines
• Lien Waiver Collection
• Payment to Vendors, Supplier, and Subcontractors

It’s important to remember that money is a commodity, which means it’s widely available. While money is the end goal, your partner on a construction project is what’s most important. When speaking with construction factoring companies, it’s imperative to make sure you are speaking with their construction expert. Choose the company that knows the ins and outs of a construction project. Make sure you are working with an expert who understands progress billing, lien rights, and all aspects of construction. Speak with a construction factoring expert today!