For many new, small and growing plumbing contractors access to working capital creates a real financial headache. With this problem there are two items to consider:

Item 1 – Expenses
Your employees, vendors and suppliers have their own payment terms and if you don’t pay them on time you risk loosing them.

Item 2 – Unpaid Client Invoices
Most plumbing contractors find that their clients take 30, 45 or 90+ days to pay their invoices. This can mean you are waiting on funds for upwards of two months even though you have had to pay your expenses much quicker.

What working capital options do plumbing contractors have? 
Banks have not been lending to plumbing contractors so where else can you turn if you don’t have enough working capital on hand to cover all your expenses?  One option to consider is construction invoice factoring, also known as accounts receivable factoring. With invoice factoring for plumbing contractors, a factoring company could provide you with immediate access to working capital by using your unpaid invoices as collateral. Invoice factoring is often a perfect match for new, small and growing plumbing contractors because all you need are credit worthy commercial clients, as factoring companies look at the credit history of your clients and not your business.

For plumbing contractors who choose to work with a factoring company the process is quite easy. There is typically a short application process, which can take only a few days or weeks depending on how quickly the needed documents are submitted. Once the application process is complete, each time you submit an invoice, for an approved client, you get the funds within hours. All you have to do is submit a copy of your invoice to the factoring company when you submit the original invoice to your client.

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