How to Get Out of ‘Debtland’ with EPP

Financing Invoices & Payments
December 7, 2021

“Debt is like any other trap, easy enough to get into, but hard enough to get out of.” – Josh Billings, American writer

We take you on a journey through Debtland, a nightmarish and hellish place where many companies go to die – and provide a far better alternative – Constrafor’s Early Pay Program (EPP).

Alice stormed into the office, “Help me understand this.” 

Her accountant, Charles, looks up from his spreadsheet.

“Our business is doing great. Our phones are ringing off the hook and I can’t even find enough workers to fill all the jobs we’ve got lined up. I haven’t taken a day off in months, but I feel like I have even less for myself at the end of every month. What’s going on?” Alice sighed.

Charles explained carefully, “Remember last year when we were running out of money, you had to borrow from everyone just to stay afloat? Well, the chicken’s come home to roost. For better or for worse, Alice, we are knee deep… in Debtland”

Alice looks confused, “Debtland?”

Charles grabs his hat and opens a door that Alice didn’t even know existed in the office, “Here, come with me, let me show you just how far the rabbit hole goes.”

Level 1: Bank Loans

Charles and Alice soon arrived at an eerily quiet lobby, with the only sound the noises from the clicking of keyboards behind bulletproof windows and hushed conversations. Outside, a massive crowd of people are looking to get in, but only the best-dressed are let in – and just one at a time.

“Where are we?” asked Alice.

“This is the first level of debtland – the Banks. Banks provide a term loan with monthly payments, which must be paid regardless of how much you use. They are cheaper than other types of loans, which explains why so many people want one.” Charles pointed outside and exclaimed, “But they’re wasting their time, the banks only provide loans to the most well-to-do, and only after months of paperwork, reviews, and audits.”

“Wait, you’re telling me the banks only give loans to the people who need it least?” Alice is surprised.

Charles nodded, “Welcome to Debtland, where up is down and down is up. Let’s keep going.”

Level 2: Credit Cards

Charles and Alice suddenly found themselves blinded by flashing neon lights and deafened by the loudspeakers droning all around them: “0% Introductory Rate!” “Higher Credit Limits!” “You are already Pre-Approved!”

Alice tried to talk over the booming noise “What is happening?”

“Ah, the bane of existence for America – credit cards. Who can resist the temptation to spend now and pay later? It is so easy and quick – no approvals needed, no one to look over your shoulders to ask how you’re spending the money. And most subcontractors already have a credit card for personal uses, so why not use it for business expenses also?” Charles sighed.

“You’re right, so what’s wrong with it?”

Charles nudges his head towards the people scrambling to stay afloat in a pool, weighed down by a bag of stones. Every few minutes, the stones would multiply and the poor souls would have to struggle even harder just to stay above water.

“Interest.” Charles answered, “With the ridiculously high interest rates charged by the credit cards, every month that you don’t pay off your balance means more weight on your shoulders – and the interest itself will bear interest, and it will keep going and going until finally you sink to the next level…”

Level 3: Friends and Family

And with a snap of his fingers, Charles and Alice appeared in a narrow alley, and as they walked down, outstretched hands and arms grasped and tugged at their clothing.

“Give me my money!” They shouted.

Before Alice could speak, Charles started “Once the credit cards are maxed, one of the only ways left is to get more cash is to borrow from friends and family. After all, they are not going to charge you high interest rates, right? But just keep in mind those around you have limited pocketbooks… and limited patience as well. Once you run out of their money, you might also run out of their goodwill, and Thanksgiving becomes an awfully lonely holiday. And once that happens, you have no choice but to venture further into Debtland.”

“And where is that?” whimpered Alice. And they were off again.

Level 4: Cash Advances

“Behold.” 

Suddenly, rows and rows of treadmills appeared, suspended in mid-air. Haggardly looking men and women forced themselves to keep running as fast as they can, as those who failed plunged to their deaths. 

“There are those who could not stay afloat even after they have borrowed everything they could, so they mortgaged their future by getting cash advances, a loan against their future earnings. The high interest rates and the monthly payments eventually crush them, so they end up taking out another cash advance – and the cycle never ends. It is like running on a treadmill: all the running in the world to stay in the same place. But to stop running means bankruptcy.” Charles said solemnly.

Charles motioned for Alice to look up. To her surprise, she found herself as one of the runners, hopelessly trying to outrun the treadmill to avoid falling into the abyss below.

Alice screamed, jolting her from her bed and out of her nightmare.

This may be just Alice’s nightmare, but Debtland is a reality that many subcontractors have to deal with on a day to day basis. Unfortunately, oftentimes the construction company is still stuck in the bygone days when it comes to innovation and technology. Thankfully, Constrafor is on a mission to change that, by tackling the issues which are the most troubling to our subcontracting clients.

And as cash is the lifeblood of every construction business and slow payments are the number one complaint we hear from subcontractors, Constrafor has launched the Early Pay Program (EPP) to help you get paid now for the work that you have already done. The EPP has already helped numerous contractors with their day to day cash flow needs and continues to be extremely popular within our client base. 

What is EPP? Let us tell you first what EPP is not:

  • EPP is not a loan, and in fact increases your borrowing capacity by giving you cash on the balance sheet.
  • EPP is not being peddled to third-parties, but rather backed by Constrafor and industry-respected financial partners
  • EPP will not affect your credit score, unlike traditional MCAs which generate multiple inquiries on your file

Rather, EPP is:

  • Fast – No lengthy approval process, no hassle, no forensic audits
  • Flexible – Choose how many and which invoices to submit for EPP, so you can use as much (or as little) as you need!
  • Predictable – Fees are taken up front, with no hidden fees or charges
  • Peace of Mind – Transfer most of the late payment risk to us! No longer worry about how much longer your GC will take to pay you

Constrafor’s EPP is the new, best way to finance your subcontracting business, so that you don’t have to dive into the rabbit hole with Alice, and instead focus on what you do best – running your business. Schedule a meeting to learn how Constrafor’s Early Pay Program can help your business stay out of debt.