It’s nearly that time of the year again!
The rush to complete your construction project before the December holidays.
Most of the time, the “pre-December” rush is followed by the “post-December” cash flow crisis. This holiday period usually has two effects on the construction payment cycle
- All sub-contractors want to be paid up to date before the holidays
- And the lack of production over the holidays creates little to no invoices for the month, causing obvious cash flow issues that follow afterward.
How to survive the Construction break over December
If you have an extremely high-yielding project that needs to be finished in time before the break over holidays, and you are willing to pay the premium rates to get high-demand finishing trades you would probably want to make use of Bridging Finance to enable you to afford this with no problem.
On the other hand, if you can afford to wait through this period and put your project on hold you might want to wait for January and February. During this quiet period of the year (compared to before the holiday) prices are much lower and availability much wider.
It may have complications with the clients but submitting an Extension of Time (EOT) for overpriced trades and non-availability of resources, is a better discussion to have now than a solvency discussion with a liquidator in March.
It may also be useful to utilize a debtor finance facility. If your invoice in late December and know your clients won’t process your invoice until January and then pay end of February- this type of facility is handy to get your creditors back into normal trading terms at the start of the year. If this is an option, you’re better off setting the wheels in motion now while your cash flow is good- have the facility ready to go when needed.
Whatever route you decide to take, make sure not to lose control of the costs of your projects to finish before the holiday period.
CorpFin offers business financial relief by filling the gap with asset-backed term loans. If it is to ensure you don’t miss out on the high-yielding opportunity before the break or to help with cash flow issues after.
Ensure your business has the right funding to survive the coming construction break.
Simply apply for business funding today.