Compared to lines of credit or traditional bank loans, financing linked to factoring offers the opportunity to get, quickly and easily,construction companies ,the funds you require.
In this blog we explain how to take advantage of them as a construction company of minor works so that you materialize your work in a timely manner.
Generate liquidity with checks
If you are worried about not being able to start with your contracted works because you have not yet received payment for them, financial factoring helps you. It is an instrument that works as a direct credit to provide you with liquidity and is backed by your issued checks.
Among its advantages are:
- It is useful for rescheduling liabilities and covering temporary cash deficits.
- It is not recorded as debt.
- It has no associated products.
- You obtain liquidity from a factoring company based on the agreed fees.
- Payments are based on expected flow and not necessarily equal.
Anticipate flows with contracts and purchase orders
Your purchase orders and contracts are financial assets of great value in your company that also help you obtain financing when you need capital.
The financing you receive for a purchase order , for a product or service that has not been delivered, is equivalent to a percentage of its total amount and, with the financing of contracts, you anticipate flows over those that are already in force.
In both cases, you quickly obtain the resources you need to finance your commitments from a company specialized in factoring so that you don’t have to wait for your clients to pay.
Collect bills and checks in advance
Having invoices and checks (even if they haven’t been paid yet) is also another way to get the financing you need to start or continue your construction projects.
You can receive money in advance for these documents, since they have a commercial value that you exchange for money.
The benefits of bill and check financing include:
- You assign your payment to a company specialized in factoring.
- You receive liquidity between 12 and 24 hours after the financing is approved.
- It does not appear as debt in the financial system.
- You do not pay stamp or stamp taxes.
- Value an asset that belongs to your company.
Get working capital with a loan
In the event that you need to finance the acquisition of assets for those projects that will generate returns in the short or long term (5 years), your option is a loan for working capital . It helps you finance more specific objectives , for example, if you need to acquire new tools because remodeling and expansion projects are coming your way.
Optimize your cash desk by delaying payment to suppliers
If you have multiple suppliers and it is difficult for you to manage the charges to maintain solvency, access confirming, a service that allows you to manage and obtain better payment conditions for invoices with your suppliers .
In short, it consists of financing your accounts payable to suppliers. They benefit from getting their money up front and you, extending your payment terms to optimize your cash flow.
Study this topic further with our guide on the types of financing that factoring offers to construction companies.
Take advantage of private financing to finance your works
The financial services market is changing, therefore, in addition to traditional banking options, today you can already access more flexible factoring-related alternatives that inject liquidity so that your construction companies faces various economic contingencies.
You can even use them as complementary financing to your current loans, it does not matter if you already have other banking products. Make the most of them!