There are certain businesses and industries that rely more heavily on working capital compared to others. Operating these types of businesses will necessitate putting up enough working capital to meet the needs of your customers, even if you need to wait weeks or even months before you get paid. A good example of this would be the construction industry. The nature of the industry alone means you need to have access to an unsecured business loan for construction contractors, at least if you want to survive and meet the demands of your market.
Working Capital for Construction Contractors
When you’re in the construction business, you take on projects. One project as a contractor could mean big bucks, but this project usually takes time to complete. You will need capital to secure the equipment, machinery, raw materials, and labor. Depending on your agreement with the client, the full payment could come at the end of the project, which means you will need to secure enough working capital from the start of the project until it is completed. If you don’t, then you won’t be able to finish it.
This is why getting access to an unsecured business loan for construction contractors is necessary. It could mean the difference between survival and failure of your business.
Bank Loans and Lines of Credit are Not the Ideal Solution
If you rely on traditional financing methods like going to a bank and applying for a credit line or a loan, you will need to go through a tedious process of proving your credit-worthiness and putting up collateral. Fortunately for you, there are actually many options available for those who need additional funding, and going beyond the traditional route could actually mean a faster processing time, less stringent requirements, and a lot of flexibility.
For instance, instead of having to put up a collateral, you could make use of your accounts receivable or other existing assets like inventory and purchase orders to be able to secure additional funds. As a result, you can take on more projects and increase your profits.
What You Need to Consider
But, even if you have access to an unsecured business loan for construction contractors, you have to consider several factors that could affect your financing agreement and your choice of lender.
First, you need to consider the maximum amount you can borrow, and what this loan will be tied to. You should also consider the flexibility of the loan, because it’s always better to have full control over how you will spend the money. The fees you will have to pay should also be considered of course, although depending on the financing method that you choose, this is usually just a percentage of the receivables you’re turning over to the lender.
If you are in need of additional business funds, do check out the business loan options offered by Neebo Capital. We have several financial solutions that cater to different industries and businesses, including construction contractors. Keep in mind that opportunities are harder to come by these days, and it absolutely makes no sense to lose projects just because you don’t have enough working capital. Get in touch with us and find out how we can help you!