Health, Wealth, Wisdom & Fun

Link: http://www.billboardmama.com/factoring-and-the-unwell-construction-industry-p-451.html

The tightening of the credit market has been difficult on several businesses, particularly the construction industry which is responsible for building our nation's homes, corporate facilities, factories, apartments, offices, schools, roads as well as bridges. Therefore, the general contractors and sub-contractors still may be experiencing cash flow issues - meeting payroll or buying supplies -long into the New Year.

The industry is categorized into 3 basic areas: building (to take care of residential, industrial, and commercial buildings); civil engineering construction (to take care of roads, bridges, highways and tunnels); specialty trade contractors (to work on special projects like carpentry, painting, plumbing and electrical works.)

But there is more to construction than just new structures - this industry also works on site preparation, repairs, maintenance as well as improvements on old projects.

In addition, this industry takes care of the income and the lives of architects, engineers, inspectors, appraisers, carpenters, brick masons, electrical and drywall contractors, flooring and tile contractors as well as those who are working on asphalt firms. As such, these people could very much benefit from invoice factoring to help them get by during these difficult economic times.

Construction jobs are typically done by general contractors, who specialize in one type of construction such as either residential or commercial building. They're in charge of the whole job, and although general contractors may do a portion of the work with their own crews, they usually give out work to specialty trade contractors who typically do the work of only one.

These get orders for their work from general contractors, architects, or property owners. Owners, occupants, architects and rental agents, however, directly order repair work from these contractors.

Since the construction industry is very much reliant on economic business cycles, it is easily affected by changes in interest rates and tax laws. Changes in state or local regulations or budgets can lead to new construction or a cancelled job.

There has been an increase in factoring among contractors during the previous year, and it's helping to provide the cash flow required to pay suppliers, meet payroll and pay for insurance, even workman's compensation. Construction factoring enables companies to obtain funds based on their current accounts receivables, so they can go ahead with the next phase of a project, instead of wait till the invoices are paid.

Indeed, invoice factoring is very helpful to this kind of industry. With factoring, the need to wait for payment before the construction company begins the next phase or the next project is eradicated. With invoice factoring, the sub-contractor or construction firm can realize quick turnaround, from 24 to 48 hours, on accounts receivable due for completed stages of a construction project. With construction invoice factoring, the construction company, or the sub-contractor, can be paid immediately for accounts receivable invoices, which speeds up cash flow and improves the ability of the company to start immediately on the next stage of construction for each project.