Construction Factoring

Construction Factoring

Construction receivables are typically 25 – 90 day pay accounts.  How would you like to have cash the day you turn in your invoice?  Essentially that is what factoring is and the service we provide.   This financing tool is used by small, medium and large size businesses worldwide.  By purchasing credit worthy accounts receivable (factoring), we can help your cashflow increase to an operating level that will allow you to take advantage of new opportunities such as:

  • Immediate assess to your cash flow
  • Funding to meet payroll
  • Hire a new crew or staff member
  • Purchase needed equipment for a larger contract/job
  • Maintain your business without adding debt or giving up equity
  • Focus on NEW Business and stop chasing invoice payments
  • A potential new customer overview / credit check – Absolutely Free

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Construction Factoring details

  1. Your hard work has been completed or a PROGRESS billing is authorized per your contract
  2. The Accounts Receivable Invoice is submitted for factoring
  3. The Invoice is verified and ready for payment from your customer ( in 30-90 days)
  4. The Invoice is assigned and an advance is given (typically 70-90% of the invoice amount)
  5. Your customer then pays the invoice via a lock-box to complete the cycle
  6. You are then give the remaining amount less the fee for the time frame the invoice is outstanding
  7. Next invoice

As you can see, your invoice payment time is brought under control and limited to how long you must wait for your payment.

Easy to follow:

    $10,000 invoice today

    You factor the invoice and receive $8,000 today

    When your customer pays, you will receive the remaining $2,000 less the fee for the time frame the invoice is outstanding.

TYPICALLY 2-4% per 30 days

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Construction Factoring Tips

    A thought for you to ponder:  After your work is completed or your product delivered, your time and money have already been spent.  The customer has free labor, materials and expenses until your customer pays you the amount owed – Correct?

  • If you already know your customer pays in lets say 45 days, you’ll know what the cost of factoring will be and can pass all or a portion of that amount onto your customers invoice
  • If you have completed a job and do not have an immediate need, hold off on the advance until you need it.  This will decrease the amount of time frame the invoice is outstanding which directly reduces your factoring cost (fee).
  • Go with a company that does not harness you with a minimum per month or a long term contract that you do not need.  If you have the need this month and not the next, why penalize your business for not using the service.  OUR philosophy is to earn your repeat business month after month.