How to Use Construction Financing for Large Projects | National Advisor


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How to Use Construction Financing for Large Projects

When seeking construction financing for such a large capital investment, the objective is to borrow sufficient financing to bridge the time between making payments and obtaining revenues.

No construction project, especially those that are large in scale, can proceed without adequate financing.

The construction firm that oversees the project throughout its building cycle will have to be able to cover the costs incurred by each participant in the project from breaking ground through tenancy.

Facility financing will have long and short term aspects. Long term revenue can include: sales grants, tax revenues, and leases.

For short term, large scale projects, construction financing is usually obtained through banks, private investors, and municipal projects that may seek bond underwriting or, increasingly, alternative financing companies.

When Cash Flow Mandates Additional Construction Financing

Few large-scale building projects are underwritten through one financial source. Knowing that most of any project’s expenditures will occur during the early construction stage, prospective borrowers will use projections of the cash flow they expect.

At this point construction business owners begin to supplement their capital requirements through their financing prospects. Once construction begins, timing is critical – unforeseen delays and contingencies can be expensive and impact the project and the construction business’ solvency.

Use Construction Financing to Pay Additional Employees

In a perfect world, construction company owners would receive payments from customers early on, and have cash on-hand to pay employees. Unfortunately, this is rarely how things go, especially when a company is scaling to take on larger, more demanding projects. Construction financing empowers you to access the cash you need to continue paying employees, especially as your operation grows.

Larger-scale construction projects may also introduce the need for specialized workers. If a construction company moves from making renovations into new construction, then the existing team may not suffice. Some employees will be capable of functioning in these new roles, but others might not be. The owner must have skilled and specialized electricians, painters, iron and steel workers, and many others in order to complete each phase of the project.

As the difficulty and potential danger level of the task increases, the cost of the employee will, too. Having cash on-hand to pay the ever-growing team eliminates this additional financial stress for construction company owners, empowering them to move forward without any hesitation during each new project.

How Construction Financing Works in Speeding Up and Simplifying Large Projects

Alternative financing companies have assisted many contracting firms when the need for additional working capital arises. A major equipment breakdown, a weather-related delay and/or damage to the building under construction all require immediate attention and a cash flow infusion.

National Business Capital, a leading alternative lender, has assisted many contractors to obtain additional construction financing for their major building projects.

One key benefit we offer is our quick application – your submission will be reviewed in 24 hours or less, and if accepted, the financing is quickly made available.

We forge long-term business relationships with our clients so that when a future need arises, our Business Consultants can quickly assist our clients to obtain the financing they require. If you have questions, please call to speak with us at (877) 482-3008 or fill out our online application.

Last Updated on April 18, 2016

National Business Capital helps entrepreneurs secure quick and fair financing to save time and cultivate sustainable growth.

Our stress-free online platform is designed for simplicity and speed, helping business owners go from application to approval in a matter of hours. And while we remain a leader in the Fintech industry, our clients agree it’s our personalized service and award-winning team that sets us apart.

From SBA loans to lines of credit, to equipment financing, and more, business owners can access all the different financing programs available to them in one place. Through our streamlined process, we have helped clients secure $2 billion in financing since 2007, and, more importantly, we’ve helped entrepreneurs save a tremendous amount of time and grow faster.

About the Author, Joe Camberato

Joseph Camberato, CEO of National Business Capital, developed a passion for business at a young age. Joe started his company in 2007 in his spare bedroom and has grown to secure over $1 Billion dollars in financing for small business owners nationwide. National’s team has an amazing culture and has been name the #1 Top Workplace on Long Island 3 years in a row and counting. Joe is a trusted financial expert who’s published more than 2,000 articles in the last 3 years. His articles have generated over 5 million page views and has been featured on blogs such as Google News, Yahoo, CNBC, Forbes Magazine, etc. His passion has also inspired him to build the "GrowByJoe” YouTube channel where he shares his insights into small business trends and tips for growth. Joe also holds a seat on Forbes Finance Council and is an active member of the Young Presidents' Organization (YPO), a global leadership community.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advice from National Business Capital and the author. Do not rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely on this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there may be errors, omissions, or mistakes.