Contractor loans

[Manolo D.]

Hi BP, just trying to get my ducks in a row, so far, I have just broken ground to residential market. I am exposed to government and commercial tenant improvements or construction, where we are to perform then get paid, on these projects, we need capital to operate. Since residential are different and flexible, I am trying to stretch how flexible it is. Say I have a 100k rehab contract, and I want to sell 25% of it to a lender, that way I don't have to cash out anything, and just get paid to bankroll from that 25%. Is there a program like that for residentials? If so, how does it work. I ask because I have a 180k potential contract for apartment rehab, they pre-qualified 3 contractors and about to choose one, am about to submitted my papers next week, and contract will start mid Jan. I have inquired some factoring companies but that means I have to go and get an invoice THEN factor them out. Long story short, not for me as it will defeat my purpose. I could have just embed on contracts that if invoices aren't paid on time, the contract pauses. Now pre-funding on government contracts is not easy to find but I found one, where they fund me the materials and do the labor. These are perfectly secure because we have the performance and payment bonds posted on our surety company, plus, the government always pays, eventually. On commercials, it's quite a challenge, having a big corporate client like at&t might change their mind, whoever is lending.