Invoice Factoring B2B For Construction Companies
Owning a construction company comes with several financial challenges, especially if you need to wait 30-90 days for customers to pay invoices. This extended waiting period can create a tight cash flow situation, making it difficult to cover operating expenses and keep your business profitable.
While there are multiple ways to remedy this situation, one of the most useful and often overlooked options is the company’s accounts receivable assets. Companies may sell their accounts receivable for a discount and get immediate access to cash to help pay for expenses like payroll, business expansion, and other day-to-day operating expenses.
This method also forgoes the difficulty that comes with bank loans, which can be restrictive and take a long time to be approved—time that most businesses don’t have. Instead of wasting your precious time as the owner of a construction company, consider using an accounts receivable invoice factoring service to access capital found in your customers’ invoices.
Start your Credit Application today or fill our our contact form and speak to a factoring specialist to learn more about how we help businesses grow.
What is Invoice Factoring b2b For Construction Companies?
Invoice factoring, otherwise known as accounts receivable factoring, is an alternative form of financing that can be very beneficial to construction companies. The factoring service agrees to purchase its clients’ outstanding receivables minus a discount.
This form of financing helps businesses get the cash they need much faster than it would take for their customers to pay them, which can be anywhere from 30-90 days and sometimes as long as 120 days.
Once the credit for the construction company and their customer (debtor) is approved, terms are set, due diligence and verification are completed, the factoring company advances a percentage of the invoice to the construction company usually right away and reserves a percentage to cover any issues.
Once the debtor pays the factoring company in full, the factoring company returns the balance of the reserve minus a discount.
Accounts Receivable Invoice Factoring is a positive resource that helps construction companies grow, cover payroll, meet operating expenses, and cover cash flow needs.
It is the right solution for any B2B needing immediate cash.
When Should Construction Use B2B Factoring Services?
Seeking financial help for your company can be difficult no matter what industry you’re in, but in a field like construction, with lengthy projects and considerable operating expenses, a steady cash flow is crucial.
The main benefit of invoice factoring B2B for construction companies and subcontractors is the fast cash granted by it. If you have a funding gap caused by slow-paying customers, invoice factoring can expedite the process of getting paid so you can cover more immediate expenses such as payroll.
Invoice factoring is also a worthwhile option if you are unable or unwilling to commit collateral to a bank for a loan. Factoring companies usually only care about the value of your invoices and the creditworthiness of your customers, so you won’t have to worry about any of the risks associated with marking a valuable asset as collateral.
How Great Funds Factoring Helps Your Construction Business?
How does Great Funds Factoring help construction companies and subcontractors quickly get the cash they need? Read on to learn more about our factoring process.
1. Discovery
At Great Funds Factoring, we understand that there are many financial challenges that even the most successful businesses can go through and the stress that it can cause.
We believe that good communication is key to developing a strong working relationship with our clients and will strive to be personally available to answer questions about receivable factoring.
During the discovery process, we aim to get a better understanding of your business needs, gain your trust, and determine if open account receivable factoring is a fit for you.
2. Underwriting
After you submit your credit application, Great Funds Factoring, LLC will review your credit application along with other documents required such as bank statements, master customer list, and financial statements.
3. Approval
Once the due diligence is completed Great Funds Factoring works on the approval process. Usually, the entire process both underwriting and approval takes one to two business days. When approved, we send you the proposal and all documents needed to set up your account in our portal.
4. Fast Cash
As you send invoices to your customers, we verify them and advance your funds immediately to your account, while holding a small amount in reserve until your customers send payment.
Non-Recourse vs. Recourse Invoice Factoring
Great Funds Factoring offers recourse factoring. With recourse factoring, we will work with the debtor to verify the invoice is accurate and viable via proof of delivery. We will then monitor outstanding A/R and work with them to collect payment.
However, if the debtor does not pay Great Funds Factoring and all efforts have been made to collect, the debt will go back to the client, and they are responsible for paying us.
With non-recourse factoring, the factoring company assumes all risks if the customer doesn’t pay. However, this option is more expensive and requires a greater, more in-depth credit review due to the increased risk.
Types of Construction Companies and Contractors Great Funds Factoring Helps
Any construction company that needs cash fast can benefit from Great Funds Factoring’s help. The company’s money that is locked away in accounts receivable is a great resource for capital, and we’re here to help you gain access to it more timely so you can cover expenses and grow your business.
If your construction company requires extra funds to cover things like payroll and operating expenses, then Great Funda Factoring, LLC is the B2B partner for you.
Below are examples of the types of construction companies that can benefit from invoice factoring:
- General contractors
- Subcontractors
- Residential Home Builders and Developers
- Commercial Property Developers
- Specialized Industrial Construction and Developers
- Infrastructure and Heavy Construction Companies and Developers
Let us help move your business forward
Great Funds Factoring LLC
Invoice Factoring Will Help Your Construction Company Boost Cash Flow Fast
You need a steady and dependable cash flow for your business to run smoothly. If your construction company is restricted by invoices that take a long time to get paid, then Great Funds Factoring can help.
Call Great Funds Factoring at 910-My-Money (910-696-6639) or use our online contact portal.
We encourage you to fill out the online credit application and unlock the power of your customer’s unpaid invoices now.
