Construction Receivables Factoring

Construction Invoice Factoring for Better Cash Flow

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Construction receivables factoring is a vital funding option for subcontractors and construction companies that issue progress billing invoices to their customers, typically with payment terms ranging from 30 to 90 days. This financing solution helps safeguard cash flow by addressing the issue of unpaid invoices.

Requirements:

$2 million a year minimum volume
Commiment: 12-month
No invoices where the project is bonded
No invoices over 90 days
No retention: No funding for projects with any portion on retention
$500,000 minimum of eligible receivables
Our customer must perform 75% of the project work themselves
Profitable bidding and execution track record
Produce accurate financials and Work In Progress (WIP) reporting
Diversity in project sizes and lengths
Accounts Receivable must be greater than Accounts Payable

Additinally:

A simple estoppel letter must be signed by Account debtors
First position on all assets required
Principal (s) must sign a validity guaranty
Principal(s) should not have any significant issues in their personal credit or background that would raise concerns for the underwriter. Mediocre credit, however, may not be a disqualifying factor.
Account debtors must undergo a credit approval process

Required Items:

Most recent A/R Aging report, either Summary or Detailed (preferably aged by Invoice Date, not Due Date)
Copy of an Open Invoice from A/R Aging, along with supporting documentation (such as Purchase Order, Contract, or Vendor Agreement)
12-month Financial Statements and YTD P & L and Balance Sheet
Most recent A/P Aging Summary Report
Copy of Principal(s) Driver’s License(s)
Copy of Certificate and Articles of Incorporation
Last three months of Operating Account Bank Statements
Any additional information you would like to provide to assist us in evaluating transactions for funding
Any additional information requested by the underwriter during the due diligence process

Once we receive the information, we will forward it to our construction affiliate for review. You will then work with an assigned representative moving forward.

If you are unable to meet any of the above requirements, we may still be able to refer you to another lender. Click on the short form.

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