Commercial construction financing is complex and difficult to many contractors and sub-contractors. And even where the business climate is healthy, finding good financing for either commercial or residential real estate has always been a challenge. There is hope though, as the emergence of construction invoice factoring has given great relief to small and medium commercial contractors in recent years. Continue reading to learn more about this powerful financing business tool that has seen financially challenged constructors yearn great rewards amidst all challenges facing them.
Generally, the commercial construction industry is complex and risky. Sometimes, misfortunes happen and things turn ugly for all involved in the projects. Delayed payments for instance could derail the whole construction project. And since few very money lenders accept to offer financial assistance in the construction industry, a huge crisis may end up happening. But construction invoice factoring has seen this and many other challenges get resolved without affecting the project itself. Sometimes contractors still ought to seek financial help from the big banks, but the rigid process required to get financing in the construction industry blocks out a lot of small and medium investors from acquiring financing.
The limitations posed by banks however might be the main reason why invoice factoring has been successful over the decades. Factoring companies do not give keen attention to financial qualifications but the account receivables form the construction companies. This criterion has largely borne success for both the borrowers and the factoring companies since collateral is solely tied on the success of the construction project.
The benefits of using invoice factoring are many, but the most important one is that you get stable and predictable financial assistance for as long you will need it. In addition, the amounts of financial assistance you receive grow as your business grows. The more projects you have might also help you qualify for better and bigger loans. Again, there is no time wasted waited for invoices to be processed. In most cases, you receive advance payments almost immediately after asking for it. This in turn allows you to concentrate on all your projects without fear of getting out of cash.
So who can qualify for invoice factoring? Usually, people working alongside reputable contractors and commercial clients have higher chances of getting this kind of financial assistance. Again, locating invoice factoring companies when you are a reputable contractor is never hard. And as we had earlier stated, getting the invoice processed is often a very quick process.