Construction Company Finds Factoring Benefits For Payroll

Generally it appears that the bigger the job the slower the payment. Think about a construction company that secured a contract to service an event for a very large business. The large company pays out on the 10th of every month, but the construction company pays its employees on the first.
The problem is, The construction company will need to pay their employees before they receive payment from the large company. This small business does not have the cash flow to buy all of the required supplies for the event and pay their employees. What options does the construction company have? Delay paying their employees? Implement for short-term credit with their bank? It’s important to pay employees on time and seeking credit from a traditional financial organization might take more time than wanted due to the demanding approval process.

One remedy to solve this construction company’s cash flow problem is to make use of account receivables factoring. This way of short-term financing would permit the construction company to invest in supplies, pay vendors and meet payroll.

It is crucial to know that when your business is experiencing difficulty meeting payroll you will find a number of remedies available to you. Staying aware of these remedies is essential, particularly when time turns into a factor. Applying for short-term credit from a bank normally takes time and the application process is tough. Take the time to learn about the options available to your business now so that if you end up in a situation where you can’t meet payroll, you’ll know what to do. Have a solution before the problem arises.