Don’t fall latter to cash flow issues

By: Leah Virzi

Let’s say you own a construction business in Iowa. Your business has many projects currently in the works and you are looking to expand your business. Although you want to allow your business to grow, you are about to face two major problems with winter approaching: you will have to halt these projects due to the weather, which will in turn halt your steady flow of income and you do not have enough money saved to contribute to both your payroll and the growth of your business. You want to pay your hard-working employees while growing your business, but how can you do both without the necessary cash flow? We have an answer for that.

When you’re in a rut and need funding to move forward, you have no reason to panic and fear that your business will fail, because you have so many viable funding solutions to choose from. These solutions include equipment financing, a line of credit, an SBA loan, invoice factoring, and medium-term or short-term loans. Each option is tailored to fit your business’s needs when you are seeking funding. Particularly, in the construction industry, some loans may be better than others. For example, taking out a medium-term loan to provide funding for the loader you just bought seems senseless when given the option of equipment financing. You may also find that it is more advantageous to use invoice factoring, rather than a line of credit to meet your payroll on time, when your clients are taking too long to pay you back.

Having these types of options will definitely come in handy, especially when you need the funding fast. With the options of a short-term loan, equipment financing, or a line of credit, you can easily apply and see how much you can qualify for, all within one to three business days. Invoice factoring, another fast and easy solution, can take about one to two weeks. Most of the options have shorter and easier applications than the kind you would find with SBA loans or term loans. These faster funding solutions are also the ones that you can find to be more beneficial to your construction business since there are only a few months out of the year where income may not be steady.

SBA loans and term loans are beneficial for your business as well, but are usually more beneficial when you are looking to expand your business or purchase more inventory. To qualify, you have to submit an application, along with necessary documentation. Once the application is submitted, it can take about two to four weeks to process your information and get you the funding you need, depending on the type of loan you’ve applied for. Now, that wait may seem long after seeing how fast it can take to apply for and receive other forms of funding, but the flexibility you have when paying off your loan makes up for it. This flexibility just means that you have a set monthly payment you can easily budget for, as well as the option to refinance if found to be necessary.

There are so many different options but as you can see, some are better than others, depending on your situation. Applications are easy to fill out and you will have funding within a month, which can be comforting, especially when it is the middle of winter and you are unable to work on lucrative projects due to the weather. Taking advantage of these funding solutions will benefit your construction business in the long run.