Construction Business Best of Times and Worst of Times
John Sawyer, owner of Construction Finance, begins the “What is Construction Factoring? Tutorial Series” with a little background.
My dad was an english teacher when I was growing up and made me read books. My kids today don’t read too many books unless they have to for school. They are too busy texting, instagraming, snapchatting, facebook and devouring so much online information. But my dad made me read books. Charles Dickens novel, “The Tale of Two Cities” starts out with, “It’s the best of times and it was the worst of times. I didn’t know what that meant when I read that but since I entered the construction business in about 1995, I learned what it meant. In about the year 2000, it was the best of times for my little construction company. I had about 15 full time carpenters, we had work, business was booming. But at the same time, it was the worst of times. I did not have the right cash flow for the tools, to keep all my employees paid, to keep all my vendors and suppliers paid on time. It was the worst of times when it came to cash flow and growing too quickly.
So what are your options? You can go to the bank. Often times that takes many weeks, perfect credit, and lots of approvals. You can say, “yes” to these hundred people who call you every day telling you that, “you’ve been pre approved for $100,000 of working capital. Sign up now and all you have to do is pay us back $1,000 a day forever.” But, there is another option, you can sell your invoices to a construction factor, such as Construction Finance, for a much more affordable rate than that $100,000 working capital that they offer you over the phone and force you to pay back $1,000 a day forever.
In my next video, I’ll go over the rates and how it works exactly to make it through those ‘worst of times and best of times’.