Cash is the lifeblood of the average construction business. When you have enough of it, you can pay your bills on time, settle debts, pay construction worker wages, and put money aside for the growth and development of your business. Cashflow is vital. When you are cash-poor, you find it difficult to finance new projects and you cannot take on new work until you have been paid for the last job, which restricts your ability to grow and develop your reputation. The construction industry is a notoriously tough place to develop a healthy cashflow for a business, but there are ways to get around the problem of contractor late-payment.
Construction finance is a specialised form of finance that provides a cash advance on the money tied up in an Application for Payment. Ideal for sub-contractors with an otherwise profitable and busy business, construction finance offers the following advantages:
- You Can Pay Your Expenses
When you own a construction sub-contracting business it is likely you have a lot of outgoings, including wages for workers, fees for planners and architects, cost of supplies and raw materials, and cost of rental equipment and maintaining vehicles. All of these expenses need to be paid on time, but just one late payment from a contractor and you end up getting behind. A construction finance loan from a supplier like www.ultimatefinance.co.uk has the benefit of allowing your payments to be made as normal, and ensuring you do not default.
- You Can Find Better Projects
The flexibility you get with construction finance allows you to work on more lucrative projects, and to set up better terms for deals. When you are struggling for cash you are more likely to have to work to punitive terms and you end up making a loss in order to survive until the next month. A construction finance loan is ideal when you are building up your business as it gives you the chance to work on projects without having to negotiate payment upfront, which is difficult to achieve when you are new to the industry.
- You Can Expand and Grow
When you do not have cash tied up in non-payment you can instead use the capital to expand your construction business and move forward. You can search for new clients, advertise for customers, and take on new projects without fearing a cashflow drought. You can have the confidence to spend money on developing the business in order to increase profits and develop your experience and reputation.
- You Have Secure, Confidential Finance
A construction finance arrangement is easy to set up and is confidential, so contractors do not know you have taken out finance. It’s also easy to set up a finance agreement according to your needs and the amount of money you need.