The construction industry rakes in billions of dollars year after year. Private construction projects gross 670,799 million while public construction projects total 272,340 million. For private construction, residential projects are just slightly higher than non-residential projects. These figures show that being in the construction industry means you will never run out of projects, because there will always be new infrastructure to build. However, it also means that it’s a highly competitive industry with many players. And when it comes to competition, it’s really all about who gets the contract and who has the biggest working capital to ensure timely completion of projects given to them.
The Problem Faced by Construction Companies
In the construction industry, it’s all about committing to delivery. A construction company won’t be able to commit delivery timelines to prospective customers if they don’t have confidence in their ability to deliver in the first place. The ability to deliver on projects is based on a lot of factors, and these include:
· Timelines: When bidding for a project, the client will be looking for certain timelines because they will always have project completion time in mind. For instance, if they need a building erected by a certain month, they will work with the contractor that can meet this deadline. Timelines therefore are very crucial.
· Capacity: Each construction project will be different in size, so this means it will have a different set of requirements in terms of capacity. A client will choose a contractor that can commit to the size of the project based on its current resources. According to the Bureau of Labor Statistics, the total construction industry in terms of number of people averages a total of around 5,941 in employment. And that’s just your people. This will be spread across various contractors and subcontractors, so capacity will really depend on how many people you have in your employ as well.
· Available working capital: Directly related to timelines and capacity is the available working capital of the construction firm. If you’re sitting on low a working capital, you can’t confidently make a pitch and get contracts left and right. This is why knowing where to get an unsecured loan for the construction industry is important. It helps you get the working capital you need to grow and get projects.
The beauty of unsecured loans
When you have access to an unsecured loan, this will be to your advantage because normally, applying for a loan is very tricky. Traditional financing institutions such as banks would have a long list of requirements and are quite stringent when it comes to approving loan applications. You’ll need to have a stellar credit history and track record, as well as a lot of other prerequisites. Collateral (in the form of equipment, real estate, and others) is also usually a requirement for such type of loans.
Many construction companies find these requirements quite difficult to meet. But the beauty of applying for an unsecured loan for the construction industry is that you don’t need any of these requirements. Instead, these lenders will look into the credibility and credit-worthiness of your client.