For many subcontractors who find themselves in the position of wondering if they will be paid by a general contractor, once submitting the pay application and invoices, partnering with a factoring company can help. Disputes causing these concerns can arise from many things, including change orders, completion amounts, possible damage and set-offs. Factoring companies can help ensure that all parties, including subcontractors and general contractors, are on the same page, the work has been completed and is satisfactory.
Subcontractors and general contractors find that when partnering with a factoring company there is an added level of checks and balances that helps everyone. Factoring companies help to ensure that subs, suppliers and vendors are listed with the pay application ensuring that they are getting paid. Factoring companies also verify with the general contractor that the work has been done, which puts the subcontractor in a better position to get paid. Factoring companies can also get lien releases to help protect both the subcontractor and the general contractor.
Factoring companies assist subcontractors with many back office operations and add a layer of protection to help ensure payment once pay applications are submitted to the general contractor that is not currently in your subcontractor clause or contract. Additionally, the factoring company has the general contractor verify the quality and timeliness of the work keeping all parties informed.Back to blog