How to Determine the Right Construction Factoring Company
One of the worst things that can happen to a construction company is a temporary stoppage in cash flow. That can make it hard to plan for the future, or even just to do the day to day tasks. The more time you have to spend worrying about how to make up for cash flow inconsistencies, the less time you can spend focusing on other important factors of your business. Luckily, there is a solution that doesn’t require you to drain all of your savings just to make it to tomorrow. Factoring can be a great way to keep your construction company from falling into paralysis.
First, Do Your Research
When your business’s cash flow is struggling, it’s natural to feel like you have to solve the problem right this second. However, it’s important to keep in mind that when you go with a factoring company, you’re going to be with them for a long time. You want to be a hundred percent certain that they’re exactly the company you want to be in a relationship with. Just as with any other relationship, you want that truly understands your needs and goals.
Make Sure They Understand Construction
Construction is like no other industry in the world. Some may be similar, but construction is unique. A part of the industry that’s never going away is progress payments. Any company you work with needs to know that disruptions and glitches are a part of the price of doing business. Late payments, disputed charges and more – that can be what’s it like dealing with contractors sometimes. Adaptability is key when searching for a firm. They need to know that they won’t get their money until you get yours first.
Terms of the Deal
A long-term contract is what people usually think of when it comes to this kind of loan. That is what most of them are. However, you can find some that offer flexibility. Since the construction business is so unpredictable, it can come in extremely handy to have a factoring company that can get you money when it’s most necessary. The same goes for financing invoices. Many firms make you finance each and every single invoice in their entirety. You’ll find some that give you the option to keep some and finance others. Another thing to look for in a firm is one that truly grasps how there’s more to credit than simply your company’s credit score. Consider your clients’credit, as well as those of your business partners, particularly if your credit isn’t exactly where you’d like it to be. A little flexibility can go a long way towards steering your company out of an unexpected emergency.