Construction Factoring Companies
Factoring Your Construction Invoices
Whether you’re operating as a general contractor on a large contract or a subcontractor with various projects, construction factoring companies understand all the ins and outs of your industry. They understand ongoing payroll, supplier, and even union costs when it comes to your expenses. In some cases they may even be able to help fund them directly. Additionally their knowledge of different billing methods, including progress and milestone, are crucial to assisting your cash flow and growing your business.
A construction factoring company will have rates and terms similar to that of a general factor. They will typically advance between 70 and 80 percent of an invoice value. However, they will often take into consideration variables such as retainage on a project and direct supplier payments when calculating an advance rate. Construction factors are typically open to financing a one time invoice or ongoing invoices depending on your needs. Therefor, if you have one project or multiple that need factoring they can assist.
The process with a construction factoring company starts much like any other factoring transaction. The construction factoring company will conduct an initial application process, with no cost or commitment required. Once approved the factor will then provide a terms sheet and a factoring agreement to be signed and returned. After that is returned they will then request final documents such as company financials and invoices to factor. Finally, the factor will pay your subs and suppliers (dependent on the factor’s policy) and get the lien waivers to ensure lien rights.
Here are some industry specific fields we’ve had the pleasure of assisting:
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Benefits of Invoice Factoring For Contractors
Factoring is a readily available solution to your cash flow crunch. Whether you’re waiting 30, 60, or even 90 days to get paid there is a construction factoring company for you. Check out some of these other benefits from the factoring companies we work with: