If you plan on selling invoices it is important to know whether the funding proposal is for “recourse” or “non-recourse” factoring. Here is an overview of both methods. A Look at Non-Recourse Factoring Just like it sounds, there is no recourse for unpaid receivables against the client. The client selling invoices is not financially obligated to the factoring company in the event an approved and funded invoice is not paid by the customer. To protect their investment, the factoring company will check the credit strength of account debtors and verify invoices with customers. They will also want to handle the payment [...]
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Being a contractor in today's environment is extremely difficult. Banks are not lending and contractors are reliant on their customers to pay their invoices in a timely manner, which most of the time means 30-60-90 days. All the while you’re expected to make payroll, pay vendors and try to grow your business. This is impossible without access to working capital which factoring for construction companies and contractors supplies. If a bank won't lend you the money you have got to either: Turn down jobs Find jobs where General Contractors/owners pay promptly, which aren’t abundant because most contracts are “paid-when-paid” Find an [...]