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Financing for Subcontractors
Specialty contractors or subcontractors specialize in a construction trade and are responsible for completing a specific portion of a construction job. Subtractors are usually hired by a general contractor that has a contract to build and manage a construction project. With this being the case, subcontractors are usually the last contractors to get paid on a construction job. Specialty contractors that have the cash reserves to support a job without a subcontractor loan do, while others utilize subcontractor loan programs to finance new jobs.
Subcontractor typically bill in arrears for time and materials and are paid when paid. Paid when paid contracts means that a subcontractor is not paid until the general contractor is paid by their client. This puts subcontractors at the bottom of the payment waterfall, making late payments a common occurrence. Subcontractor loan programs are a common way to help support the upfront and ongoing expenses of being a subcontractor.
Subcontractor loans are a great way to make sure that operating cashflow is strong for day to day expenses. Whether you are looking to purchase equipment or buy materials, there are subcontractor loan programs available. Below are some of the ways you can use a specialty contractor loan program.
Purchasing new equipment
General working capital
Purchasing new tools
New project bids
Advertising and marketing
Purchasing new equipment
Subcontractor Loan Options
Asset-Based Loans for Subcontractors
Factoring for Subcontractors
SBA Loans for Subcontractors
Bridge Loans for Subcontractors
Business Line of Credit for Subcontractors
Mobilization Funding for Subcontractors
Term Loans for Subcontractors
Equipment Financing for Subcontractors
How to choose a Subcontractor Loan
Choosing the right subcontractor loan program can make the difference between a successful project and one that’s not. It’s crucial to make sure that you choose a subcontractor loan program that will provide the right about of money, at the right cost, and with the most flexibility. As an example, to purchase equipment for a subcontracting business you should be using a long-term equipment loan. If you are purchasing job specific materials, a line of credit is best for you. Aligning the subcontractor loan program to the use of funds can make jobs more profitable and give you the operating cashflow to continue growing. At SMB Compass we will guide you through the application process and make sure that you choose the right general contractor loan program for your business.
Interested in learning about your financing options?
Speak with a Lending Advisor today!