Construction Invoice Factoring

Invoice Factoring For Construction Companies

Invoice Factoring For Construction Companies, cash flow is critical to construction companies and invoice construction finance can help fund the gap. This will help business cash flow between raising bills or applications for payment and getting paid. Invoice Factoring helps take the issues of credit control and the worry of cash coming in to pay wages, supplies and merchants away by releasing cash from tied up outstanding invoice payments. Contractual debt, uncertified stage payments or applications for payment? Is the problem becoming greater and holding you back the faster your business grows? Invoice Factoring for Construction businesses could be the perfect fit for that payment gap.

Funding for Construction Companies – How does it work?

Construction Invoice Factoring works by advancing monies against any unpaid and outstanding invoices your construction business may have. Running a construction business presents many challenges and getting paid is probably at the top of the list. Having the right construction finance and funding in place is critical to maintaining sufficient cash flow to meet the demands of running a successful business.

Construction Companies can gets cashflow support by using any type of invoice funding product, this can help you put together a flexible and tailored cash flow finance solution using invoice discounting or factoring. These cash flow finance solutions are often the most effective solution for construction companies and are growing rapidly in popularity. The number of construction companies using invoice finance jumped 27% in 2017.

Staff needs paying, tool hire, materials and plant all need to be settled month end before companies are placed on stop, Alternative Funding helps overcome this issue by funding your application for payments or invoices.

Construction Invoice Factoring is even available against uncertified applications for payment, unlocking valuable cash flow to your business rather than facing delays while you wait for applications to be certified. Alternative Funding is the perfect fit for builders and construction companies looking to grow.

Invoice Factoring Funds Application for Payments

Stage payments, uncertified applications for payments, and the contractual nature of debts make it difficult for construction companies to secure construction finance from traditional lenders. Structured staged payments or ‘Applications for Payments’ will be considered for invoice funding. Invoice Finance helps fund application for payments, this supports your business by not having to wait for the payment to arrive in 60, 90 or 120 days. Invoice finance for construction companies will fund the application. Funds are then advanced within 24 hours of requesting the draw down. This will help towards materials and operating costs to allow the completion of the contracts on time.

Construction Factoring & Discounting – Access to Working Capital

This can stop even the most profitable construction firm from getting on with the next job and growing their business. Having immediate access to this cash will allow you to pay for staff, materials, equipment hire and other suppliers required so you can bid more competitively on those large upcoming projects. Just what you need when margins are already tight.

This cash flow solution comes in the form of invoice/application factoring which will help you increase the size of the projects you can take on. Construction invoice factoring allows you to effectively advance the major part of the payment(s) you are expecting to receive from a job you have completed so you don’t have to wait the full 30-120 days and can get on with funding the next project.

It’s not easy to maintain a healthy cashflow and that affects your day-to-day operation as well as your ability to tender for new projects.

Both invoice discounting and invoice factoring provide an immediate cash payment based on of the value of your billing or applications for payment, enabling you to take advantage of preferential early payment discounts with your suppliers, maintain a healthy cash flow and increase your cash flow as your turnover grows.

The fact that the facility is linked with your sales allows you to grow your business without any of the usual cash flow worries. Funding is available within 24 hours of raising a bill or application for payment.

Benefits of Construction Invoice Factoring

Alternative Funding will also manage credit control and cash collections, this process is carried out on behalf of the business to save time and money. This is just one benefit invoice factoring delivers to construction businesses. This enables business owners to focus on what they do best, which is running the day-to-day business. Invoice discounting is a confidential services that ensure that customers are unaware a finance facility is in place. With discounting there is no credit collection service in place, so it would be advisable for the business to have a credit control department in place to ensure smooth running of this product.

This type of funding is perfect if you are the Main contractor or even sub contractor. All trades need to be paid on time to ensure the contract is finished on time and without penalties.

How can Invoice Factoring benefit my Construction Business?

  • Once a construction invoice factoring facility is agreed, cash tied up in unpaid billing is usually released within 24 hours so you can stay on top of your operating costs and the costs of buying raw materials for your projects. Construction finance enables you to access cash tied up in contractual debt, uncertified stage payments or applications for payment.
  • Where previously arranged, the chasing of invoice payments due to you, can be outsourced to your factoring company allowing you to focus on your business. However, if you would like to maintain control of your ledger, then invoice discounting allows for this without affecting your chances of securing finance against your invoices.
  • The facility grows with your business so there is no need to regularly renegotiate unlike with a bank overdraft.
  • For greater peace of mind the majority of factoring companies offer optional bad debt protection by way of “non-recourse factoring” – a form of credit insurance. You can add this on to your funding facility providing you with peace of mind.
  • Regardless of the amount of contracts you have or how big your project is, there will be a factoring company out there willing to provide you with the credit you require.

What Do I Need To Do To Get Invoice Factoring For Construction Companies

Alternative Funding is one the US’s largest Invoice Factoring Brokers for construction companies. Since we started in 2017 we have sourced and secured invoice funding for over 200 construction companies in the US.

The process is really simple to receive Invoice Factoring for Construction companies. If you invoice your clients or use application for payments, Invoice Factoring will work for you and your business. Simply complete the online form and submit with three months bank statements. Once we have received it a funding specialist for the construction industry will contact you at your earliest convenience.

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