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Ending the Cash Crunch: How invoice factoring helps contractors grow in a competitive market

Working capital shortfalls can be a serious problem for contractors. Extended payment terms mean you often get paid long after a job is completed, leaving you without the cash flow you need to fulfill your monthly obligations or to invest in new projects.

Ironically, the more successful you are, the worse the problem can get. Large capital outlay and day to day expenses on a major project can leave even the most successful businesses in a cash crunch, reluctant to take on more business, anxious to grow staff or invest in resources. Put simply, extended payment terms strangle even the most nimble company’s growth plans.



Why traditional lending doesn’t help when you need it most

An obvious solution might be to consider taking on a bridging finance loan from a bank. However, bank loans involve stringent financing requirements and potentially high interest rates. Add to that the heavy bureaucratic paperwork, lengthy processes, miles of red tape, and one starts to question if this is actually a viable option. Is there room for such a lengthy cumbersome and archaic process in a post-covid economy? In a market that demands that businesses be adaptable and agile, it goes without saying that they need access to cash flow solutions that deliver as quickly as the changing landscape they exist in.

A transparent solution, with no hidden costs

Fortunately, there are simpler and more straight-forward financing options available, especially designed to help contractors focus on growing their businesses.

Invoice factoring is an effective and affordable way to ensure your business has the cash it needs to thrive. However, alternative financing can be opaque and expensive.

That’s why Frequency Capital provides a simple, transparent solution to the contractors’ cash flow trap. Frequency Capital’s accounts receivable factoring facility will pay you up to 90% of the invoice’s value. That means immediate working capital, without the hassle of complex financing options. It’s completely transparent, with no hidden fees.

Capital to compete with the best


Let’s consider a practical example.


Your business successfully completed a major project. The project involved considerable expenditure, but due to extended payment terms, your invoice will not be paid for some time.

The resulting cash crunch may make it hard, or even impossible, to meet current expense obligations such as crew wages, salaries, rental charges, subcontractors and so on. Worse, you now lack the operating capital to fulfill additional contracts.


But that’s not all. You want to upgrade your equipment and invest in new skills, so you have a competitive edge in the bid for your next major contract. Without cash, your business risks stalling.


Now, instead of enhancing your business offering and solidifying your long-term strategy, you have the whole business scrambling to collect invoices.

No doubt, this scenario - give or take a few details - will be familiar to most contractors.



Frequency Capital: A cash flow solution for contractors


Frequency Capital understands the difficulties that can arise on account of extended payment terms. Therefore, we provide a personalized service to enable contractors to meet their cash flow needs as effectively as possible.


Unlike the one-dimensional view of businesses that the banking system often takes, we partner with contractors to identify how to effectively finance unpaid invoices in order to optimally enhance a business’s operations.


The opportunity cost of neglecting financing

Invoice factoring is not merely about mitigating the risks of constricted cash flow. It’s equally about providing working capital to take advantage of new opportunities.

Remaining in a cash poor situation when effective financing is available produces significant rotational opportunity costs for companies operating in a competitive environment. Staying ahead of competition requires an innovative approach to all areas of business - especially the ones that are governed by stagnant, legacy thinking.

If you’re tired of the stress surrounding extended payment terms and a restricting cash flow, it’s time to look beyond traditional lending methods. Instead, use the power of invoice factoring to optimize cash flow and stay ahead of your competitors while relieving your business from cash flow worries.


Get in touch with us today to find out more about invoice factoring and how we can help you improve your cash flow - info@frequencycap.com

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