Are you a construction subcontractor who is waiting 30, 60, or 90 days to get paid by general contractors or commercial clients? Slow payments often create cash flow problems, leaving you unable to run your business effectively.
You can fix this problem and improve your cash flow by using construction factoring. Construction factoring allows you to finance slow-paying invoices from general contractors and commercial clients. This financing gives your company the funds it needs to make payroll, pay suppliers, and, more importantly, take on new jobs. Note that to qualify for this program, subcontractors must invoice a minimum of $500,000 per month.
We are a leading construction factoring company in Canada and can provide high advances and competitive rates. For more information, get an instant quote or call us toll-free at (877) 300 3258.
How does factoring work?
Factoring is fairly easy to use and can be implemented by most construction subcontractors. The factor finances your accounts receivable by advancing a portion of the invoice as soon as the work (or work segment) is completed. This initial advance covers about 75% of the invoice and provides you with immediate working capital.
The transaction concludes once your customer pays their invoice on their usual terms. Once the payment is received, the factor settles the transaction and rebates the remaining 20%, less any fees.
Most construction subcontractors use factoring on an ongoing basis because it provides them with predictable cash flow. For more detailed information, read “How Does Factoring Work?”
How much does factoring cost?
The price of a construction factoring program is determined by the size of your invoices, the quality of your clients, and how long they take to pay. For an instant rate quote, fill out this form or call us toll-free at (877) 300 3258.
Benefits of our program
A factoring program can provide a number of benefits to your construction firm. The most common benefits include:
- Enables you to offer net 30- to 60-day payment terms to clients with confidence
- Simple qualification requirements
- Works with small and mid-sized firms
- Can be deployed quickly to handle cash flow emergencies
For more information, read “Advantages of Using Invoice Factoring.”
Unfortunately, most Canadian factoring companies are not comfortable financing construction-related businesses. We are construction specialists and can usually work with construction transactions that have:
- Progress payments – where payments are made upon a percentage of completion
- Pay-when-paid clauses (also known as pay-on-pay)
- Payment retention (often stipulated as a 10% retainage)
Is factoring right for you?
Our solution may be right for your company if you:
- Are a construction subcontractor (we cannot fund GCs)
- Have cash flow problems due to slow-paying clients
- Need funds to pay operating expenses
- Can’t qualify for conventional bank financing
Need construction factoring?
We are a leading provider of construction factoring in Canada. For a quote, fill out this form or call us toll-free at (877) 300 3258.
Want to learn more?
Are you looking to learn more about factoring? We want to help you make an informed decision about using our services. To learn more, review our articles. Popular articles include: