Construction factoring explained by Capstone

Preparing for Increases in the Construction Sector

14:25 14 March in Blog

Rebuilding America’s infrastructure has been a popular political topic of late, with both parties stating a commitment to the fixing the nation’s roads, bridges, railways, and more. The country’s aging infrastructure has long been a thorn in the side of commuters and a focus on modernization will not only make bridges safer, allow for a better transport of goods, and increase quality of living, but will also increase employment in the construction sector.

Since the recession, employment in the construction sector has seen a boom. According to the Associated General Contractors of America, approximately 1.6 million jobs have been added in the past six years. Currently, both parties have plans to fund infrastructure projects totaling $1 trillion. For the construction industry, this poses two important considerations: hiring and cash flow.

Hiring and Cash Flow Considerations

In order to be competitive for bids and to ensure that jobs will be completed in a timely fashion, construction companies must be prepared and fully staffed. Staff will also need to be properly trained. Too often, increased projects in the construction sector lead to needless accidents because of poor hiring or overworked staff that is stretched thin. Part of ensuring that safety is a priority is putting in place appropriate hiring practices and focusing on continuing education. Construction companies that are able to show that they complete their projects in a timely fashion and that they value their employees’ safety may be better positioned to apply for and win bids from the government.

In addition to hiring and training, it will be necessary for construction companies to ensure they have enough cash flow to grow and to take on more projects. When companies are sidelined because of open invoices, it can be difficult to increase productivity. One way that many construction companies have found to effectively grow is through factoring.

How Factoring Can Help

Factoring, which allows construction subcontractors from all trades to receive working capital against their unpaid invoices, can be a quick way to increase cash flow in order to purchase materials, pay staff, and continue to deliver their work on time and on budget.

While some companies may turn to banks for a line of credit, they will likely find that lending to small business remains slow despite a growing economy. Rather than dealing with the mountains of paperwork and untold amounts of time that bank loan applications and decisions require, companies who are looking for a more streamlined process should investigate invoice factoring.

Partner with Capstone Capital Group, LLC

At Capstone Capital Group, LLC, we value our partners’ time. We understand that the hours spent filling out banking forms would be better invested in our business. We offer pre-approval to prospective clients so you can better understand your chances of approval.

When your business is in need of funding, you shouldn’t have to wait. That’s why Capstone Capital Group is committed to quickly helping businesses. With flexible structuring and multiple options available, our factoring programs are designed to provide our partners with the assistance they need to move forward and grow their businesses.

If you’re ready to investigate whether factoring is a viable option for your business, don’t hesitate to give us a call at 212-755-3636 or apply now.

Construction Loans on the Rise Says FDIC

04:57 19 September in Blog

According to recently released figures by the FDIC, outstanding construction loans for both residential and commercial projects increased to $223.2 billion in the second quarter. That is a 4% increase over the first quarter.

According to economists, the increase is due to the fact that lenders appear to be growing more comfortable extending credit, and the demand for credit is improving. Based on this, both residential and commercial construction should increase steadily moving forward. This is because the level of construction still remains low historically and vacancy rates are falling.

Vacancy rates have been declining in recent years. Since 2010, office building vacancies in the top 79 U.S. metropolitan cities have dropped slowly from their recent high of 17.6%.

Despite the small increase, construction lending has a ways to go to even approach half of its highs during the real estate boom. Homebuilders and lenders seem to agree the boost is slight, staying optimistic, as they have seen more banks of all sizes entering the construction lending space in the past 12 months.

It seems evident that one factor needed to revive the stalled home construction business is an increase in lending to builders. Home construction accounts for 5% of the U.S. gross domestic product but remains at 3.1% for the third consecutive year in this year’s second quarter.

Several factors which have impacted the new home market have been:

  • Shortages of lots and labor.
  • Stagnant wage growth for would-be home buyers.
  • Higher new home prices have steered some potential buyers to the cheaper resale market.

Nevertheless, the construction market seems to continue to gain steam, albeit slow, and according to some, banks seem to be a bit more aggressive at chasing the right deals which has helped loosen overall loan terms. According to Scott Laurie, chief executive of California builder the Olson Co. “It’s a good world today, the best it has been to be borrowing and building since the recovery started.”

With construction lending on the rise, it appears evident that more and more constructions jobs are slated to increase this year as well. Thus the need for invoice factoring by contractors, sub-contractors, and construction companies has never been greater. It is common knowledge that in the construction industry, customers are slow to pay contractors, sub-contractors, and construction companies for their work. Now these individuals and companies can get immediate cash for their invoices.

With Capstone Capital Group, LLC’s single invoice factoring program, we can help you move on to the next phase of your project right away. You can even take on new projects without worrying about additional working capital requirements.

We have been helping small to mid-sized businesses for years to obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you typically get from most banks. Capstone Capital Group, LLC specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.

To learn more what we can do for you and your business, visit us on the web at https://capstonetrade.com/, or give us a call today at (212) 755-3636.

Download: Infrastructure Investment & Jobs Act – Contract Opportunities and Funding Analysis

Capstone wants your business to take full advantage of the opportunities (or use projects) available through the Infrastructure Investment & Jobs Act recently signed into law.

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