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A mechanics lien is one of the most powerful tools that contractors can use to get paid. That’s true whether you’re in Florida or Alaska, or anywhere in between. But in order to be valid, it must be filed in the county where the project took place. Unfortunately, getting details wrong on a mechanics lien filing is an all-too-common mistake. And, potentially, a very expensive one. Let’s face it: Most of us probably…
For cash-strapped contractors, invoice factoring may be one option to help solve cash flow problems. However, not every factoring company is willing to put their money in the construction industry. Some factoring companies are reluctant to purchase construction invoices because they think it’s too risky, or because they don’t understand the industry. Invoice factoring is pretty unregulated, and there are so many companies out there. How do contractors know which ones can help? We…
In the construction industry, it can be hard to access cash when you need it. Many small contractors don’t qualify for a business loan or line of credit from the bank, and credit cards are an expensive option. Invoice factoring provides a middle ground, offering cash to contractors backed by the value of their unpaid invoices. If you’re considering factoring for your construction business, you’ve probably heard of spot factoring and contract factoring – the…
If your construction business needs cash, but is looking for an alternative to a bank loan or credit cards, invoice factoring could be a viable solution. As with any financing arrangement, it’s important to understand the cost of factoring and its components. In this article, we’ll give you a breakdown of the costs of factoring an invoice, and how those costs are calculated. Table of Contents Why contractors use factoring When a construction project…
Published on Jan 08, 2020| Reading Time: 4 minutes Some contractors break the mold when it comes to construction payments, taking steps to make sure everyone on their projects is paid on time. Throughout 2019, the California contractors on this list had the highest rates of on-time payments to subcontractors. Their payment practices received positive ratings and reviews from customers and clients. And they encouraged parties on their projects to send visibility documents, like preliminary…
Like any industry that relies heavily on extending credit to get business done, construction can be risky. Unless you’re in the 0.0001% of subcontractors who get paid up front and in full, you’re providing a line of credit to the general contractor that you’re working for. Before you even bid on a project, it’s important to ensure that the GC has a track record of paying their bills on time. You can check the commercial…
The average time it takes for contractors to get paid stretches to nearly three months. That puts a lot of strain on a construction company’s accounts receivable (A/R). As a result, contractors often leave money on the table in an effort to collect faster – or, in some cases, collect anything at all. According to the 2019 National Construction Payments Report Survey, the majority (78%) of contractors rarely or ever charge interest on late…
As the area’s population grows, construction projects in Dallas are growing to keep up. That can seem like a good thing for construction companies – but periods of growth are actually some of the riskiest for contractors. In fact, subcontractors are three times more likely to fail in a growing economy than during an economic downturn. To make matters worse, Texas has some of the most complex laws governing mechanics lien filings in the US.…
In the early phases of a construction business, the business owner likely handles the construction accounting. They manage their own books, take care of accounts receivable (A/R) and payable (A/P), and oversee payroll. As a construction business and list of projects grows, however, making financial decisions will reach beyond the role of a single person. You may find yourself wondering: Do I need an office manager, bookkeeper, controller,  or CFO? And what’s the difference…
For a large part of the 2019 summer, Oceanwide Plaza was making waves in the Los Angeles construction scene. In June alone, the stalled project racked up nearly $40 million in mechanics liens from unpaid contractors! Now that temperatures have started to cool off, it looks payment disputes in Los Angeles County may be following suit. The 497 liens filed in LA County in August reached only $52 million. (That’s nothing to sneeze at –…