{"id":9178,"date":"2019-09-04T17:50:19","date_gmt":"2019-09-04T14:50:19","guid":{"rendered":"https:\/\/www.become.co\/blog\/?p=9178"},"modified":"2019-09-09T12:31:22","modified_gmt":"2019-09-09T09:31:22","slug":"construction-factoring","status":"publish","type":"post","link":"https:\/\/www.become.co\/blog\/construction-factoring\/","title":{"rendered":"Construction Factoring"},"content":{"rendered":"\n

The 2019 Guide to finding the best construction factoring options<\/span><\/h2>\n\n

Time flies when you\u2019ve got unpaid invoices. Days turn to weeks, weeks to months, and before you know it, you\u2019re buried up to your hardhat in overdue bills.<\/span><\/p>\n\n

The bad news:<\/b> this is a common issue for small business owners in the construction industry.<\/span><\/p>\n\n

The good news: <\/b>there\u2019s a solution that you can make good use of – construction invoice factoring.<\/span><\/p>\n\n

Not familiar with the term? Keep reading and we\u2019ll give you the long and short of what construction factoring is and how you can use it!<\/span><\/p>\n\n

What is construction factoring?<\/span><\/h2>\n\n

Construction factoring (also referred to as construction invoice factoring) is a financial solution designed to help solve cash flow problems associated with unpaid invoices and non-paying customers in the construction industry. You can compare it with <\/span>freight factoring<\/span><\/a>, which serves the same purpose but specifically for the trucking industry.<\/span><\/p>\n\n

Similarly to <\/span>invoice factoring<\/span><\/a>, the basis of construction factoring is that a lender provides roughly 80% of the money owed to you in the form of a lump-sum loan. The lender collects the payments from your customers and then pays you the remaining balance minus the fee for their services.<\/span><\/p>\n\n

Unlike other types of <\/span>business loans<\/span><\/a> though, construction factoring can be difficult to acquire. The reason for that is (ironically) the same reason that construction companies seek factoring in the first place – unpaid construction invoices can take a while to collect.<\/span><\/p>\n\n

This places construction companies in a bit of a \u2018catch 22\u2019 where the solution is often out of reach specifically because of the problem they\u2019re looking to solve. It also creates something of a niche lending option, since fewer lenders are willing to provide construction invoice factoring.<\/span><\/p>\n\n

That said, there are construction factoring companies out there that you can qualify with. We\u2019ll get to that below.<\/span><\/p>\n\n

What is construction factoring used for?<\/span><\/h2>\n\n

In the most fundamental sense, construction factoring is a business funding solution that\u2019s used to free-up cash stuck in the form of unpaid invoices. That money can then be used to keep your business operating the way it should (or to improve it!).<\/span><\/p>\n\n

You can use construction invoice factoring to:<\/b><\/p>\n