One of the biggest challenges faced by subcontractors is cash flow.
In the excitement to bid on and win a big project that promises big profits, these organization’s forget that they have to spend considerable amounts of money upfront–and payback could be many months ahead. Mismanaging invoices is a good way to bankrupt your business. However, using invoices to fund your next project is a good way to grow your business.
As a PWC report noted: “Cash is the lifeblood of any company. It’s more important than ever for businesses to optimize this fundamental aspect of financial performance if they’re to maintain a steady course in these uncertain times. Given that working capital is the cheapest source of cash, nothing is more vital than having a cash culture and good liquidity on board.”
And cash flow is dependent on paid invoices! Many contractors spend considerable time tracking down payments for work already completed, often months ago. These delayed payment terms cause cash flow uncertainties, often making it difficult for subcontractors to commit to new or bigger projects.
While there are many widely known ways to finance your business – like lines of credits, bank loans, or credit card debt – there’s also a way to secure cash without taking on more debt or adding a liability to your balance sheet. Through invoice financing services like Constrafor’s Early Pay Program, subcontractors can shorten their revenue cycle, improve their cash flow and reduce costs – all without incurring debt or giving up equity.
What are the benefits of invoice financing with Early Pay Program?
- EPP is not a loan, and you can use the funds to grow your business where needed. You can use EPP to cover payroll, pay down high-interest debt, or use the extra funds to take on new projects.
- You can apply in minutes. Just choose which invoices to finance – we’ll review and then deposit the payment within 48 hours, directly to your bank account.
- Our low upfront charge ensures that you never have to worry about hidden fees, high interest rates, or long-term monthly payments.
- Take advantage of the most competitive rates and receive payments reliably and securely without involving third parties.
With a construction-first invoice factoring service, like Constrafor’s Early Pay Program, Subcontractors can take control of their cash flow and turn receivables into a liquid asset.