invoice finance

Factoring Construction Receivables: When It Makes Sense and When It Doesn't

Factoring — selling receivables to a third party for immediate cash — is sometimes used by construction contractors to accelerate cash flow. In exchange for 1.5-5% of the invoice value, a factor provides cash now instead of in 60-90 days. For cash-strapped growth-stage contractors, it's an option. For most established contractors, it's an expensive answer to a cheaper problem.