Acquiring or increasing your firm’s bonding capacity can open a whole new market of jobs. It can allow you to take on a multitude of public works projects or larger, more profitable, higher-profile private jobs that require a more hearty bonding capacity than what you, or your agent, are used to.
The traditional method of laying out up to 20% of the bond value in cash collateral may be uncalled for if you approach your agent in the right way with the following cash-saving opportunities.Read more
It might be advantageous from a tax standpoint to run a business through multiple entities. For example, a construction company might form a separate company to own and lease its trucks and equipment back to its related entities. Or a corporation might transfer appreciated property to an affiliated corporation in order to limit risk in case it is sued.Read more
Financial statements are a must-have for any organization. The balance sheet reveals how much its assets and liabilities are worth based on historic costs. The income statement tells investors and lenders how profitably and efficiently the company has performed during the accounting period. The statement of cash flows details sources and uses of cash from operating, investing and financing activities. All this is relevant information for company insiders, as well as for lenders, bonding companies and other stakeholders.Read more
Creating a formal debt management plan, rather than borrowing haphazardly, can save your firm thousands or even tens of thousands of dollars in interest.
Following certain best practices and using a structured approach to your company’s debt plan is part of an effective construction finance, accounting and tax strategy. First, create a table that lists all current debt, including working capital lines of credit, loans of any kind, any interest bearing notes or other financial obligations. Don’t include Accounts Payable.
Here is an exampleRead more
Everyone struggles to keep up when business really takes off. Projects come all at once. You may hire additional field workers to meet the demand. Payroll is stretched because payments which come in on your new projects lag months behind the large sums you lay out weekly to pay your workers.
This type of project financing concern is not yours alone. All construction contractors face this type of project financing snafu to some degree. The basic problem is your firm gets paid months after you need the money to run your projects.Read more
Joint ventures are common in the construction industry, especially with large long-term projects. These collaborative arrangements allow construction firms to work together, for a limited time period, on one or more construction projects.
The upsides include pooling of expertise and resources, broader geographic reach, reduced risk, and enhanced financing and bonding capacity. But joint ventures also have potential pitfalls, so they need to be set up and managed with care.Read more