When large businesses seek out construction companies to do business with, longevity is often a factor that stands out from the competition. This takes sound financial principals and superior management to achieve. Sometimes, for situations out of a construction business owner’s control, cash flow problems can create a bad credit situation that’s hard to correct. It can happen to any contracting firm. Clients often pay bills late, equipment failures happen, job sites get shut down, vendors demand their money upfront, and employees must be paid first. Business debts can quickly add up, payments get behind, and the construction business owner has to make sacrifices to stay afloat.
THE CONSTRUCTION BUSINESS IS RECOVERING, BUT THERE ARE NEW CONCERNS
So too, the US construction business is undergoing transformation and is still in recovery from the most recent recession. The PwC 2016 Engineering and Construction Trends report shows that established construction companies in the states face ongoing competition from those in lower-cost nations. 46 percent of American construction business owners agree that there are more threats to their businesses than three years ago, despite a healthy growth rate of 15 percent.
HOW SMALL BUSINESS LOANS HELP CONSTRUCTION BUSINESSES THRIVE
In many cases, working capital loans can help carry construction companies through tough times and help restore any periods of bad credit. The key is to start researching this early and partnering with a small business loan company that understands the unique nature of the construction business. If you are working on maintaining and expanding a construction firm, here are some benefits of working capital loans to consider.
BENEFIT #1 – SMALL BUSINESS LOANS FOR BAD CREDIT DON’T REQUIRE ANY UPFRONT FEES.
Unlike other forms of business credit, lenders who provide small business loans for construction firms with bad credit don’t require any upfront fees or even collateral for approval. Companies often have large sums of money tied up in receivables, equipment, and building supplies so they cannot afford extra costs on top of this. Working capital loans work differently because they are based on the difference between revenues and outgoing expenses. A lender that understands the construction business well knows that there are no extra funds available for down-payments or processing fees.
BENEFIT #2 – WORKING CAPITAL CAN BE USED AS A BUFFER DURING SLOW FINANCIAL PERIODS.
The construction business can be unpredictable at times due to outside factors. For example, bids can take months to approve, and then once they are in process the funds can be tied up for months and even years as project details are worked out. Contracts can change, additional investors can come in with new requirements, and even state and county codes can alter the way work happens. Weather conditions and political factors can even put a halt on projects. During these slow periods when money isn’t flowing as freely, working capital loans can provide a buffer of money to pay for business expenses. It’s always better to have extra money set aside to cover emergencies, provide payroll for skilled labor, and maintain the business during these temporary setbacks – the work must go on.
BENEFIT #3 – CONSTRUCTION FIRM OWNERS CAN TAKE ADVANTAGE OF FLEXIBLE REPAYMENT TERMS.
Running a construction business is made easier by small business loans that offer flexible repayment terms. As business picks up over the coming year, it’s possible to pay off your small business loans earlier or you can simply pay on your regular schedule. If your business is struggling, then you can work with an understanding loan representative at United Capital Source about your situation and let us connect you with the right financial solution. Whether you own a large commercial contracting firm with multiple smaller branches, or you are in the middle of starting up a new contracting firm in any area of construction, there is a program for you.
BENEFIT #4 – WORKING CAPITAL LOANS ARE PERFECT FOR SEASONAL BUSINESSES.
According to the Small Business Administration, the way that working capital business loans are factored works well with seasonal or cyclical businesses, like construction companies. Many construction firms find that money flows easily during the busy spring and summer seasons, when projects are active and assets are at their highest. Bridge financial programs are available to help provide working capital while you are waiting on milestone payments from clients, a process that we know can take up to 120 days or more at times. There’s no need to delay projects, lay off construction staff, or sell off equipment to avoid getting a bad credit rating.
BENEFIT #5 – EASY TO APPLY AND GET APPROVED FOR SMALL BUSINESS LOANS WITH ZERO RISK.
In most cases, a small business loan from United Capital Source is easy to obtain and takes less than 24 hours for funds to come your way. The process starts with contact from you, and completing a simple form. We will gather some important information about the constructing business and determination is made on a number of factors, including your average revenues and how long you’ve been in business. If you have bad credit, we may not even look at this; instead basing a decision on your merits as a business owner. There’s no risk to you and you can decide if you want to pursue the small business loan or find alternatives on your own – no pressure here!
Every construction firm needs a solid financial foundation under it to succeed in a volatile market, especially with real estate and property values still in flux. Having the peace of mind knowing there is help available to finance much-needed construction projects and maintain adequate cash flow can make every project less worrisome. This can help you continue to build on your good name and quality work as a construction business owner.