In construction, business moves fast.
If you’re the main contractor you’re often expected to front the cash for supplies and subcontractors before you’ve received payment from your client.
If you’re a subcontractor, you’ll often be paid late, especially if your client is being paid late by their customers.
Payment delays can cause huge issues for your business.
If you’re late paying your suppliers they might freeze your trade account. This means you’ll either have to pay up until you can use them again or go through the hassle of finding another supplier who will offer you credit.
If you’re late paying subcontractors they might decide not to work for you again. But even if they do, if the payment delays are frequent then they might be less motivated to do a good quality job.
What’s the alternative?
Fortunately, there’s a lot of facilities available for construction businesses. Whether you’re a main contractor who needs to seize control of their cash flow, or a subcontractor who wants to pay their workers on time and stress-free.
By using facilities such as invoice factoring or supply chain finance the construction business gains control over its cash flow. Meaning they can pay their staff and suppliers on time. This results in a far less stressful company, with fewer phone calls and emails chasing money that’s due.
This also allows the contractor to build up a reputation for being a good payer. Which can result in more motivated subcontractors and suppliers.
Taking control over cash flow is also critical for future business planning and forecasting. If you know when cash is coming in you can control when it goes out and plan ahead accordingly. This makes expansion far more comfortable.
If you’re a construction business looking to smooth out cash flow or buy some new equipment, get in touch with us today and we’ll analyse your business in some more detail. And, if appropriate, match and make introductions to the right lenders.