Financial Considerations for Construction Business Development

construction business development

There have been many evolutions this year as we learn how to work within an economy of change and continue to hope for a pandemic-free future. Construction business development in 2022 seems to be at a pivotal moment for many construction-industry companies. Spending for commercial and residential development continues to be high. Today, construction organizations have opportunities for growth.

“Now is the time for construction business owners to ensure they have the right financial solutions in their toolbox to meet this growing demand,” says American Express. The American company specializes in multinational financial solutions for individuals and businesses.

One financial solution that can be a benefit to small- and minority-owned businesses is American Express’ Contract Connections. This service can assist business owners in securing contracts with large companies and government sectors.

Loans are another way to ensure you’re able to pay for materials and equipment. Small-business lender Clarify Capital says the best construction business development loans are:

  • Equipment – You can borrow up to 100% of the money needed for an equipment purchase. The equipment is the collateral. APRs are not set, but usually competitive.
  • Invoice financing – This is a better choice for business-to-business rather than consumer-based transactions. Invoice factoring lets you borrow 100% of outstanding invoice value(s). The invoices are your collateral, and the loan approval depends on your customer’s credit rating.
  • Line of credit – This works like credit cards but with a lower interest rate and a specific APR (annual percentage rate). You pay interest on exactly what you borrow, not your line of credit.
  • Short-term – These require no collateral and are a traditional go-to for construction contractors. You can secure funding quickly.
  • Small Business Administration – SBAs are long-term loans partially backed by the government. Interest rates are low. They are a lifeline to many construction companies, but the application processing time can be lengthy.

This blog is for informational purposes. However, construction business development is something our marketing professionals know about. Our building permit data is sorted in a customized way that serves as a business development tool. Get a free sample.

Contact Construction Monitor.

Leave a Comment

Your email address will not be published.