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Does anyone do factoring for the construction industry?

Most factors don't want to touch it. Banks don't want to touch it. With everything that's happened in the housing market and the commercial building market, it's not a great place to be in, and being a builder is just such hard work these days. Other factors welcome construction factoring and have been doing so for over 40 years now.  They specialize in construction factoring and know how to handle construction clients and talk to their customers to get the results they need.

Often times, builders don't have enough money to pay their payroll, for the gyp rock or stone or concrete people working, not to mention the supplies that they sometimes have to pay for up front, and the owner is telling them, "well, just wait around.  Just wait, once you finish this phase, once you finish that phase, we'll get you some payment," and they're sitting around waiting for payment for 70, 80 days at a time. They just don't have the kind of cash flow to support that.

This is especially true with many construction firms just now starting to get out of the building slump, and with customers controlling more and more of the market, with it being in such harsh circumstances, it's even harder for them to get anywhere. 

To get financing from banks is more and more difficult every day. You require four years of substantiated financials with tons of supportive work. It's not possible for these small to medium sized business to get there, to get that financing to get their projects done. 

With government construction, public projects are usually required to be bonded on the general contractor's level, and that's where general contractors are able to get the financing they need because they are large huge corporations, been around decades, basically. 

But the little guy, the sub-contractors that actually perform the work, they are the ones who are not able to get financing. They are the ones that go to banks and are refused because they have no financials for the past three years. They have been going down with the down economy, and they really don't have the credit to substantiate getting financing.  That's where a factoring company that handles construction financing comes in. 

Those sub-contractors sell those invoices that belong to or were billed to the general contractor to the factoring company which in turn funds the sub-contractor so they can pay their suppliers and their payroll and let the factoring company wait around for the payment. They don't have to.

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