Construction subcontractors face cash crunches due to paying employees, contractors and suppliers. Small independent subcontractors typically operate without huge cash reserves. Further, most general contractors and commercial customers wait until 30 to 60 days to pay their invoices. Fortunately, construction contractors can turn to construction invoice factoring for help.
Construction factoring companies are familiar with the unique challenges of the construction industry. They understand the inherent risks associated with various progress billing payment methods, such as percentage of completion and milestone billing. Construction factoring companies also know how to handle the complexity of sub-contractors and lien laws.
Construction factoring is a valuable financial tool for contractors to pay employees and suppliers quickly and easily. Receivables financing is particularly helpful if you have slow-paying customers or large fluctuations in cash flow. As a construction contractor, you get paid immediately for invoices without having to wait 30 to 90 days for payment from your contractors which allows your business to expand and take on more jobs that you otherwise can't afford.
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