Reasons Why Construction Industry Factoring is NecessaryOne of the keys to thriving in the construction industry is making sure payments are made on time. Another is to be certain you have a steady capital flow to meet expansion demands. Since waiting 30 to 90 days for an invoice to be paid is unacceptable, you�ll need factoring.
Why Does Factoring Matter in Construction?
A factoring company offers construction businesses assurance that they will get the funds necessary to foster growth. Rather than go through a complex bank loan, a factor will provide the programs and services your construction business needs, particularly a steady cash flow via invoice receivables factoring.
With a factoring program you�ll never have to worry about not having the money to pay for supplies, expand your company and other expenses. What a factoring company does is wait for your client to pay so you don�t have to. Depending on the factor you�ll receive 80% to 95% of the accounts receivable immediately and get the remaining balance after your client pays up.
How Factoring Works for Construction Businesses
There are basically just three steps involved here, no matter what factoring company you choose. First your construction company provides the services or supplies to your client. Next you send them an invoice, a copy of which you also provide to the factor.
The factoring firm will proceed to finance your construction industry business with a large percentage of the amount immediately. Because the amount is usually around 90% or so, you�ll be able to make necessary payments. Your client meanwhile, pays directly to the factor based on the invoice�s terms. Finally the factor gives you the remaining balance minus their small charge.
Convenient and Dependable
The procedure described above shows how simple the process is. Furthermore, these companies have websites where you can apply. These companies are also easy to negotiate with and you don�t have to settle for a long term contract. In other words you get to use factoring when it is necessary. In addition these companies let you specify which accounts you want them to handle.
Because factoring companies are dependable and quick, it�s easy to why construction companies are relying on them heavily. In this industry, it�s essential that the payroll and other expenses are paid quickly. If you have to wait for a month or longer, the consequences for your business can be disastrous. Without the money you�ll be forced to pass up offers and other tasks. You also won�t have the funds necessary to expand your base of operations. Because your competition isn�t standing still, failure to expand could cost you in the long run.
With a factoring company, you�ll be assured of a reliable cash flow. You don�t even have to worry about collecting since the factor will do it for you, so you can focus on the matters at hand.
If you�re searching for an affordable and dependable construction industry factoring, NeeBo Capital will fit the bill. This factoring company offers rates at 0.59%. Furthermore, there are no monthly minimums or financials needed so proposals are very quick.
Why Choose Us?
Rates at 0.59% - 1.5% for 30 days
Quick Link to Financial Resources:
|Purchase Order Financing
|Accounts Receivable Financing
|Asset Based Lending Options
General Articles about Accounts Receivable Financing and Factoring:
» 08/01/2012 Debt Financing or Off Balance Sheet Financing?
» 09/15/2011 What to know when selecting a Factoring Company