Securing a commercial construction loan can be an arduous process if you aren’t prepared for it. There are multiple options for businesses looking for commercial construction financing, including contract financing, factoring, merchant cash advance/daily debit and SBA loans, but there is no standard set of requirements for what you need in order to apply.
A common commercial construction billing mistake companies tend to make is to delay submitting an invoice or pay application for the work completed during slow months. Construction companies, in most situations, have work schedules that ebb and flow as their jobs progress. Busy and slow months are inevitable. Federal holidays and poor weather conditions often result in slow months in November, December and January. Sudden and unforeseen holdups are caused by other subcontractors on a job or something as straightforward as a delivery delay or permit problem.
Commercial construction contractors are in an almost impossible situation. The economy is booming, and public and private organizations are looking to build new offices, hotels, skyscrapers and more. But to make all that happen, organizations — and the general contractors they hire — depend on thousands of subcontractors who are willing and able to do the work right.
The construction industry is still considered a high-risk lender, despite all the demand, which means that few commercial contractors are able to qualify for traditional bank loans. And unless the contractor’s credit score is at least 600, most will not qualify for a Small Business Loan (SBA) loan.
There are many factors behind landing a winning bid. For upper-level commercial construction projects — especially for those lucrative government contracts — you have to prove that your company can complete the work for a competitive price and that you have the means to carry it through start to finish. A Financial Capability Letter can solve this problem.
The devastation caused when Hurricane Harvey hit the Gulf Coast on August 25 was staggering. More than one million people were displaced and roughly 200,000 homes were damaged in a 300-mile span.
The cleanup and recovery will be a long one for the region, but within a few months, contractors working for the Texas Department of Transportation cleared 10 million cubic feet of debris from the state’s highways.
The front door of one of the most historical sites in the country is undergoing a major renovation. The Independence Visitor Center, in Philadelphia, welcomes millions of people from around the country and around the world who want to see where the Declaration of Independence and the United States Constitution were signed.
Securing a bond can be a major hurdle for commercial construction companies looking to land bigger projects and grow their businesses. This is especially true if bidding on a government contract.
What is bonding?
Bonding is similar to an insurance policy, in that a surety bond company will cover the cost to fix any problems that occur, such as failing to complete the project, once a claim is filed against the policyholder. Unlike an insurance company, however, the surety bond company can then charge the policyholder for any dollars they pay out if a claim is a made.
Tampa International Airport (TIA) is nearly finished with the first phase of its roughly $2.3 billion expansion. The first phase has included the construction of one of the largest car rental facilities in the country (2.6 million square feet), and a 1.4 mile people mover track, plus renovations to each of the four existing airsides and a major remodel of the main terminal.
Commercial construction contract financing is a way for contractors and subcontractors to borrow dollars they need for the early stages of a particular job by using the value of their contract as collateral for the loan.
Mobilization Funding, sometimes referred to as Mobilization Financing, is a commercial construction contract financing option for subcontractors who are otherwise unable to secure an SBA or traditional bank loan, but who need additional funds for the first few months of a project. It is a short-term option that allows you to borrow up to a certain percentage of the total value of the contract, then repay the loan with the dollars received from contract payments.
The world of insurance can be confusing, especially for commercial construction business owners who need coverage for their commercial contracting companies.
The challenge is buying the right insurance so that your company is adequately protected and still within its operating budget. Insurance expert, Beckie Ervin of Ervin Insurance Concepts, recently spoke with Mobilization Funding to point out common, avoidable mistakes that can save you money and better protect your business.