Construction companies are huge investment ventures and their needs and output could be quite erratic. As a construction company owner, I am sure you have experienced a period characterized with low sales. These times usually require that you have a cushion and a cash advance for your construction company could come in handy.
On other occasions, you might be in need of extra cash to get more stock, hire more workers or even revise the salaries of your committed employees. All these efforts will have a positive impact that will see your business grow and get more returns due to a well-equipped and motivated workforce. As much as there are reasons to justify your need for more cash, getting additional cash for a construction company could be quite a challenge.
Reasons why it’s hard for construction companies to get a cash advance
Getting a cash advance for construction companies could be quite a challenge due to a couple of reasons. This can be attributed to the nature of the construction industry and its vulnerability to adverse economic changes. For instance, the recent economic meltdown had the industry going to its knees with many businesses closing down after recording their worst performances. But the converse is also true as many construction companies usually reap sizable profits during booming economic times.
Besides this, the industry is quite unpredictable since most construction companies are only in business when there is a project at hand. This creates a very unstable work environment and unpredicted profit margins on an annual basis.
For these two reasons, most lenders will shy away from offering a cash advance to construction companies. In order for a company to qualify for one, a stable and predictable pattern of income needs to be ascertained. It will also be prudent for a company in the industry to know the right and more convincing way of asking for additional funding.
Tips on seeking Construction Loans
Considering the slim chances of qualifying for a cash advance for construction companies, as an owner or a manager of a construction company, you need to have certain skills to increase your chances of getting the cash that you badly need. It will pay off if you specify the purpose of the loan that you are applying for. Whether it is for the completion of a pending project or for purposes of paying your employees on time, communicate this clearly. You may also require additional cash to boost your stock, hire or purchase new equipment as well as increasing your chances of getting bonds or maintaining your credit ratings. By stating how you are going to use the cash, it will be easier for the lender to approve your application as they will have a better understanding of your dire needs.
The other trick is to approach lenders who offer cash advances specifically to construction companies. Such financial companies fully appreciate the risks and challenges many owners face in the industry and they will be more willing to provide you with a cash advance. You can make use of the internet or ask around for a relevant local cash advance provider.
The need for a cash advance for construction companies cannot be underestimated. Though the industry in quite unpredictable with many lenders being a skeptic on offering loans, you can increase your chances of getting one by specifying your needs besides approaching a lender that deals with construction companies.