How long might a contractor wait to get paid on large contracts without financing?

Phil RisherPhlash Consulting · No. 1 Digital Marketing Consulting Company For $1m-10m Home Service Businesses 🚀

I always wondered what companies did when they won these big contracts #electrician #airduct #shorts

22 Dec 2024 · 1 min

Watch on YouTube

0:34

Short YouTube video (Phil Risher) explaining how businesses that win large contracts can manage cash flow by using accounts receivable financing: lenders advance money based on invoices from creditworthy large businesses or government agencies for a small interest fee so the contractor doesn't have to wait two–four months for payment, allowing payroll and operations to continue.

Questions this video answers

Two to four months (speaker: "two or three months" and later "three or four months").

Chapters

What you can do is as long as you're dealing with a big business or government agency that has good corporate credit, which they almost always do, or they would be in business, then there are lenders with all over the country that will give you money based on those accounts receivables for work you've done and you're going to get paid on it. But instead of you having to wait two or three months to get paid, they'll front you the money for a small interest fee. Now you can run your business and cover payroll and move forward without having to wait three or four months where the lack of cash flow might kill you.