From my experience over the years providing millions of dollars in credit facilities to construction companies across the United States, I know that there are few industries that can benefit more from affordable access to capital than construction.

Contractors have a notorious need for working capital when cash reserves ebb. Operating a construction company comes with expensive overhead; labor, materials, equipment and insurance costs that are expensive. These expenses coupled with less than favorable payment terms mean that as jobs are being completed, there is money going out to pay vendor expenses and labor. But payments are waiting to be received from started or completed jobs. Credit needs can be further heightened if the contractor has multiple simultaneous jobs, all at different remittance (payment) schedules. These cash flow gaps usually don’t extend for long periods of time, so the perfect financial solution is a revolving credit facility which can capitalize the business to sustain cash flow and can be repaid when jobs hit certain milestones and completion.

I've seen it time and time again where contractors over-sell their work capabilities, so then as quickly as money comes in, money goes out to pay for the expenses of jobs. To get ahead of this problem, contractors often borrow short term working capital loans for specific cash crunch needs. This has been a long standing practice by construction companies, and has often been thought to be the solution. This is indeed a solution, but eventually access to available cash can dry up and the debt servicing can place your business in a negative cash flow situation. The solution is a Revolving Line of Credit

Having access to revolving lines of credit, while bidding on jobs and giving estimates sets up the company for better results because it limits the likelihood of being stuck in a situation when a contractor is trying to collect money from completed jobs to pay for mobilization on new jobs.