As Construction Heats Up Know Your Business Funding Options

By: Randy Hernandez | Chief Marketing Officer

There are two seasons: Winter and construction. For builders and contractors, longer days and warmer temperatures usually mean a busier schedule and more projects. With additional volume, these business owners may need to hire additional staff, procure new equipment, or purchase larger quantities of supplies. To keep projects on track and their business growing, builders need to know the funding options for their business.

While juggling multiple projects and cash flow, builders work hard to understand each phase of every project and where possible issues might cause delays. Delays in completion usually directly correlate to delays in payment, which could quickly lead to shortfalls in capital. And when there are delays that lead to shortfalls in capital, builders should know their options for pursuing funding to keep moving forward.

The construction industry does have specialized needs and requirements, so it is wise to leverage the industry resources that understand building and contracting. Here are some resources to keep in mind should you require funding for your building business.

Business Funding Options for Construction and Builders

While traditional bank loans are available to contractors and builders, small business owners in the construction industry should understand the range of financial products and funding options available to them.

The Small Business Administration offers flexible lending programs which directly benefit builders. For example, the CAPLines program is an umbrella program that extends loans to cover seasonal increases in expenses. This program includes a builder’s line to cover labor costs and materials. These loans are usually on a 5 year schedule and are designed to help small businesses manage expenses.

If time is of the essence, a merchant cash advance might be the best funding option. When a builder needs to cover costs quickly to secure a new contract, order supplies, or cover a gap in cash flow, they might not have the time to wait for the traditional bank loan process. Merchant advance funding from Jet Capital gets capital to clients extremely quickly. Applicants sell a portion of future revenue and receive the cash they require within just a few days.

For builders working to improve their credit scores, merchant advance funding can also be a useful tool for getting capital quickly to stay ahead of bills. Jet Capital looks at the overall health and revenue of businesses, not just credit scores, when making lending decisions. Even if a builder has been turned down for a construction loan or a commercial construction loan, they may be eligible for a cash advance.

Stay Educated

Builders are always learning about new materials, new technology, and advances in how they can build more efficiently. It is important to also keep learning about how to build your business, including changes in financial regulations and lending products. The National Association of Home Builders (NAHB) offers financial education. Many local Building Industry Associations (BIAs) also offer local education on lending and finance, often in affiliation with the NAHB.

The NAHB BuilderBooks program is another resource for builders . Beyond financial topics like budgeting and estimating, builders can learn more about marketing, scheduling, and how to sell.

Builders should stay in touch with their accountants, too.  If you have a financial professional on staff, communicate openly and discuss all business funding options, including the newer solutions like merchant advance funding.

Master Your Estimates, Follow Your Contracts, and Know Your Options

As the construction season kicks off this Spring, builders can take proactive steps to keep their finances healthy.

  • Smart, accurate estimates will start projects off on the right foot.
  • A clear contract with a multi-step payment breakdown will keep cash flowing in as it is needed.
  • Holding your clients accountable for each payment as you progress through construction is important, too.
  • Make sure you have appropriate insurance for all of your projects and workers.
  • Keep paperwork organized in case you need to apply for funding.

In other words, as you are building out in the world, be sure you are paying attention to what your business is built upon, too.

And if you need additional funds to keep your business strong, look carefully at all of your options. We are here to answer any questions builders and contractors might have about how a merchant cash advance might help their business.

Apply online today or give us a call at 866-845-9674 to learn more about our merchant advance funding.

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