6 Contractor Financing Options to Kickstart Your Cash Flow

6 Contractor Financing Options to Kickstart Your Cash Flow

1. Quick Pay ????
   With Quick Pay, a third-party advances payment on your project directly to your subcontractors upon your request to make payment planning easier and build stronger relationships. Most experienced contractors qualify, and the subcontractors typically pay the cost. The amount available varies based on the project, your client, and other factors.
2. Business Credit Cards ????
   Contractors with good or excellent credit can leverage credit cards for everyday purchases such as materials and office supplies. A typical business credit card has a $50,000 spending limit and a 17 percent interest rate, though less-qualified businesses will see lower limits and higher rates.
3. Lines of Credit ????
   Those with good or excellent credit can also leverage lines of credit, though they’re better for larger purchases that credit cards don’t cover. Interest rates tend to be slightly lower than credit cards, and a typical limit is around $100,000.
4. Equipment Financing ????
   Equipment financing may be more accessible for contractors without strong credit who need to purchase anything from trucks to excavators or office computers because the purchased item serves as collateral. The amount offered will vary based on the equipment, contractor, and funding company.
5. Trade Credit ????
   Contractors with solid relationships with their suppliers can often negotiate trade credit terms that give them more time to pay for supplies without paying interest or at minimal cost.
6. Invoice Factoring ????
   Most contractors working for large companies or government agencies can qualify for factoring, which works similarly to getting an advance on payment. Funds can be used however you wish, and the limit typically scales with the size of your contracts.