With the tough market position, things have been very difficult for many types of businesses, especially the construction based industry. The construction industry is responsible for making factories, houses, apartments, schools, bridges, roads, etc.
Given the huge capital involves in construction projects especially when the contracts are quite big, it’s very common for sub contractors as well as the general contractors facing cash flow bottleneck situation during the initial stage of the project, especially in need for for purchasing the supplies, giving payrolls throughout the year.
The Construction industry could be roughly divided into three general types which includes :
- Civil engineering where the contractors build bridges, roads, tunnels, highways, etc
- Building as well as General contractors for building commercial, residential and other types of buildings
- Specialty trade contractors working on projects like painting, carpentry, plumbing or electrical work.
The Jobs of construction not only include working in the new structures, but might also require repairs, maintenance, site preparation or improvements in the old projects, etc.
The construction industry also supports engineers, architects, appraisers, brick masons, drywall contractors, tiles and flooring contractors, carpenters, and even the asphalt companies take benefits of the invoice factoring for helping them to cover up in their bad times.
The Construction kind of jobs are generally done by the general contractors specializing in a particular kind of construction like either the commercial building or residential one. They take charge of entire job and there are cases where some of the jobs are done with the crew members and there are also cases where they give the work to the specialty trade contractors like the sub contractor who works on one project typically.
The orders for the job are obtained by the general contractors, property owners or the architects. The Repairing job is mostly done directly from the owners, architects or the occupant of the premises. Depending on the cycle of economic , construction industry might face problems like change in the interest rates and the taxing laws that affect business and individual decisions relating to the construction industry, of which bring substantial effects to the corporate . Even the slight change in the local or state regulations or budget changes can easily result into a new construction or canceled job.
With all these changing business environment, there is always a constant demand of the factoring among the contractors in the recent times as the same will aid them in provision of free cash flow necessary for payment to the suppliers, meeting the payrolls and insurance payouts, workmen compensations and lots of other issues related to construction industry.
Therefore, the construction factoring will help the business to get the funds based on the current account receivables in order to proceed ahead to the next level of the project, rather than wasting time and energy in waiting for the invoices to be paid to them.
The construction industry gets lots of advantages from the factoring agreement. With the help of factoring facility, the general contractor, sub contractor, and even the construction company will not need to wait for the payment before going to the next level of work or for beginning a fresh project.
With the facility of factoring, the construction business company as well as the sub contractor will easily be in a position to achieve fast turnaround on the accounts receivable for completed levels of the project. The construction based invoice factoring, sub contractor or the construction based company can be paid instantly for the AR Invoices which will in turn speed up the process of cash flow and will also improvise the ability of the company to immediately begin with the next construction phase of the project.