Are you a subcontractor who is waiting 30, 60, or even 90 days to get paid by a general contractor or a commercial client? Slow payments can create cash flow problems and affect your ability to pay employees and construction suppliers.
Construction factoring can get your invoices financed quickly. This solution provides you with immediate funds to pay corporate expenses and grow. And, unlike bank financing, factoring is easy to obtain and can be set up in days. Note that to qualify for this program, subcontractors must invoice a minimum of $100,000 per month.
For more information or a quote, fill out this form or call us toll-free at (877) 300 3258.
How does factoring work?
The program is simple to use and works well with most construction subcontractors. We finance invoices in two installments: the advance and the rebate.
The advance is paid soon after you submit the invoice for financing. An advance ranges from 70% to 80% of the face value of the invoice, less any retainage amounts. The funds are either wired or direct-deposited to your account.
The rebate is deposited to your account once your commercial client or GC pays the invoice, on their regular schedule. The rebate consists of the remaining 20% to 30%, less the factoring fee.
For detailed information about factoring, read “How Does Factoring Work?”
Factoring your construction receivables has a number of benefits, including:
- Not having to wait up to 60 days for invoice payments
- Better cash flow
- Allows you to offer 30-day terms to clients with confidence
- Easy qualification
- Can be deployed quickly
Easier to obtain
Our program is easier to obtain than most banking solutions and can be set up quickly. The main requirement is that you work with general contractors or commercial customers who pay invoices reliably in 60 days or less. Also, your company must meet these criteria:
- You must be a subcontractor. We cannot finance general contractors directly
- You must not have a bond for the project (though your GC may be bonded)
- Your receivables must be free of liens
- Your company must not have major legal or tax problems
- You must have experience in the construction industry
Who can benefit from our services
Companies that can benefit from our services include:
Is construction factoring right for your business?
If the following apply to you, our program can help your business improve its cash flow and grow:
- You work as a subcontractor for a project
- The GC or commercial client is taking up to 60 days to pay invoices
- You need money sooner to pay company expenses
- You turn business away because you lack working capital
How to select the right construction factor
Finding the right financing partner is key to the success of your business. Spend some time interviewing potential partners to make sure that they are a good fit for your construction company. Question you can ask include:
- How long have they been in business?
- How long have they been financing construction opportunities?
- How do they verify invoices?
- How do they handle GC payments?
- How do they handle progress payments?
- How are retainage payment handled?
- What terms do they offer?
To learn more, read “How to Find the Best Factoring Company for Your Business.”
Want to learn more about our solution?
Are you looking for a construction factoring company? We want you to make an informed decision about our services. To learn more about construction factoring, visit our construction financing learning center. We also recommend the following articles: