Funds

[s.sparkomatic.r09]

How do you fund your projects between 100,000 300,000? Say from the time work starts until substantial doneness ~~ 4 to 5 months. Supplier credit? Personal line of credit? Business line of credit? Short term business loan? Deep pockets?

I'm starting some stuff that there is noway I could cover my self, even if I pay my rent late and drink cheep beer(not that I ever drink anything but)....SBA said something about a 48 hour fast track for loans...anybody done it?

 

[DAWGS]

You should be getting progress payments for jobs even much smaller than that. If you are working for an established GC they will probably have their own billing format you will have to follow for your payments. They will probably hold a 5% retension at the end of job though.

 

[emahler]

exactly, you shouldn't have to carry more than 30 days...from what I hear, and read, the SBA loans are quite difficult to get these days...but no personal experience...

 

[wireguru]

2 rules to live by:

never put out (or be on the hook for) more than you can afford to lose

if you do use a credit line to finance a job, make sure you can easily cover the payments without counting on money from the customer

bonus:
don't use a personal credit line for business. ever. use a business credit line. heres why: the business credit lines (and true business credit cards) dont report to your personal credit unless you default, this keeps your credit score, utilization ratios, and debt to income ratio in line since your business debt isnt being considered against your personal income.

 

[cadpoint]

Ode to the bonus

Ode to the bonus

bonus:
don't use a personal credit line for business. ever. use a business credit line. heres why: the business credit lines (and true business credit cards) dont report to your personal credit unless you default, this keeps your credit score, utilization ratios, and debt to income ratio in line since your business debt isnt being considered against your personal income.

I like it ...

 

[wireguru]

I like it ...

yep nothing more important than properly setting up your corporation with tax id number, corporate checking account, DnB number, etc.

 

[satcom]

2 rules to live by:

never put out (or be on the hook for) more than you can afford to lose

if you do use a credit line to finance a job, make sure you can easily cover the payments without counting on money from the customer

bonus:
don't use a personal credit line for business. ever. use a business credit line. heres why: the business credit lines (and true business credit cards) dont report to your personal credit unless you default, this keeps your credit score, utilization ratios, and debt to income ratio in line since your business debt isnt being considered against your personal income.

We would never think of banking someones job, they either have the money or we are not intrested in their work.

true business credit cards) dont report to your personal credit unless you default. You may want to check that fact.

 

[wireguru]

true business credit cards) dont report to your personal credit unless you default. You may want to check that fact.

if you have your business set up properly (LLC or Corp) with its own tax id number, business credit cards do not report to your personal credit. When you apply for one they still pull your personal credit, but the account is not reported to your personal reports. This holds true for the actual business cards from most major issuers. There are some cards out there labeled 'professional' and ones that are marketed for business and personal use which do report to personal reports but these are not the true business cards.

 

[ptonsparky]

The few times I have had that size job, I billed monthly. On one MCC I asked for payment the day it hit the ground.

 

[jrannis]

What type of project are they asking you to carry the money for that long?
Sounds like trouble to me.
Some government projects are known to pay 90 to 180 days but are not considered very risky. Those you could factor if you really had to.

 

[s.sparkomatic.r09]

Thanks J, Factor that?s a word I want to get back to.

The jobs are gov. That?s why to 180 days(or more). I could do the jobs I?ve got the cash for that, if I pay some the supply house is good for ninety days or more.

I pay all my payroll expenses by the week taxes and all. Overhead by the month. I don?t want to do it any other way. Because if it?s paid it can?t be late. I know it sounds like I can?t manage funds, but if the 30 day GC turns into 60 day GC because of weather/changes/whatever, I?m not into penalties.

Again I could do the 180 job cash, but I?d have no money to work off of while I was waiting 180 to get paid.

Factoring, from what I understand trucking company?s sell their freight bills to factoring companies. Then the factoring company owns the freight bill and ?deals direct? the customer to get paid.

I?ve called some factoring companies some wouldn?t do contractors. Then the ones that would I really didn?t want them talking to my customers, and bothering them if they were a few days late, or give them a penalty. That?d be a deal breaker on future work for sure.

Do any of you guys use factoring? How?d that go?

 

[macmikeman]

I went into a couple like that with not a whole lot of operating capital at the start of my business. I front loaded the projects heavily. Get creative with the site expenses and remote office setup expenses and so forth if they require a breakdown for charges. It is much better if you have an extensive credit line or a large bank account however.

 

[s.sparkomatic.r09]

My question must be as old as I don't know what..........

 

[satcom]

if you have your business set up properly (LLC or Corp) with its own tax id number, business credit cards do not report to your personal credit. When you apply for one they still pull your personal credit, but the account is not reported to your personal reports. This holds true for the actual business cards from most major issuers. There are some cards out there labeled 'professional' and ones that are marketed for business and personal use which do report to personal reports but these are not the true business cards.

We have had business credit lines from large commercial banks, for many years and they all will both report to your personal credit, and your personal credit can reflect rates on your business credit. Where is this credit wonderland your talking about?

 

[wawireguy]

Keep your credit good.. Get lines of credit. Pay them off when you get paid..

 

[wireguru]

We have had business credit lines from large commercial banks, for many years and they all will both report to your personal credit, and your personal credit can reflect rates on your business credit. Where is this credit wonderland your talking about?

i dont know the structure of your particular business, what banks you delt with, or what credit lines you have so i am unable to rebut your statement. Yes your personal credit affects the rate and limits given on the business credit.

As far as where this 'credit wonderland' is.....even amex and citi corporate cards dont report on your personal........

 

[jrannis]

It sounds like you have some cash to work with. Your banker is going too be your new best friend, they see this all of the time. Show him what you have going on. You might be suprised at what help a good banker can be.
Best wishes