Are you struggling to keep your business running smoothly while waiting on payments? You are not alone. That’s why thousands of plumbing contractors turn to factoring to can give them immediate access to working capital.

Running a plumbing business comes with its own set of challenges, especially when it comes to managing cash flow. Waiting 30, 60, or even 90 days for clients to pay their invoices can put a serious strain on your operations. According to a 2023 Goldman Sachs survey, 76% of small businesses say getting affordable working capital has negatively impacted their business. That’s where invoice factoring comes in.

What is Factoring?

Also known as accounts receivable factoring, invoice factoring is a financing solution that allows you sell your outstanding invoices to a third party company at a discount. In return, you get immediate access to working capital. This means you don’t have to wait for your clients to pay their bills to keep your business running smoothly.

How Does Factoring Compare to Other Common Options?

What working capital options do plumbing contractors have? Yes, there are many financial solutions out there but three of the most common in the plumbing trader are:

Bank Loans

Banks have not been lending to plumbing contractors. And even when they would, funding was VERY slow. 

  • Pros: Potentially lower interest rates and fees.
  • Cons: Lengthy approval process, strong credit and collateral required, and may take weeks or months to receive funds.

>> Learn more about bank loans in construction

Merchant Cash Advances (MCAs)

MCAs can offer quick funding with few approval hoops to jump through. But because of the way their payment structure works they can also be very risky and expensive. 

  • Pros: Quick funding.
  • Cons: Extremely high-interest rates, repayment terms that can create a cycle of debt that’s hard to escape.

>> Learn more about MCAs in the construction companies

Invoice Factoring

  • Pros: Quick approval and funding, based on invoice value not totally on your credit score, no additional debt.
  • Cons: Fees are involved, but they are typically lower than the cost of high-interest loans or MCAs.

Invoice Factoring – A Great Option for Plumbing Companies

Invoice factoring is often a perfect match for small, growing or even new businesses like is often seen in construction. It works great for businesses with long payment times and inconsistent numbers of job contracts, and spotty credit… again, like many construction trades including plumbing. So exactly how does it work?

The Factoring Process

The factoring process

For plumbing contractors who choose to work with a factoring company the process can be easy. There is 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.

Why CapitalPlus is the Best Factoring Company for Plumbing Contractors?

Since 1998, CapitalPlus has specialized in providing factoring services to the construction trades, including plumbing contractors. Here’s why we stand out:

  • Industry Expertise: We understand the unique challenges plumbing contractors face. Our team has decades of experience in the construction industry.
  • Tailored Solutions: We offer customized factoring and other construction-empowering solutions designed to meet the specific needs of plumbing businesses.
  • Quick and Easy Process: Our streamlined process ensures you get the funds you need quickly, without the hassle of traditional financing options.

Ready to Boost Your Plumbing Business?

Taking advantage of factoring for plumbing contractors, you can focus on what you do best—running your business—without worrying about cash flow issues.

We’re sure you have questions about how factoring will look in your specific plumbing company. Give us a call (865-670-2345) or schedule some time with one of our funding experts. Let’ talk.

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