Inflation is more than a buzzword for specialty contractors.
Construction material costs are rising along with high fuel prices, affecting lead times and project success. Contractors report that supply chain disruptions impact inventory and their ability to forecast for the future. Additionally, the wait for materials forces specialty contractors into a tight spot, removing the ability to guarantee deadlines and the on-time completion of projects.
As reported by the US Census Bureau, the construction industry is experiencing the most significant price hike since the 1970s as specialty contractors carry the burden of upfront, out-of-pocket expenses required to start new jobs.
The economic downturn in the 1970s had long-term implications impacting everything from gasoline to meat prices. It took nearly a decade for the market to normalize. Although current prices have not topped inflation costs from other eras, staying prepared for extended downturns benefits businesses — especially in the construction industry.
In addition to the recent material cost hikes, slow payment has long plagued the entire construction pipeline. Yet, the gap between completing construction work and getting paid only widens. According to the 2022 Construction Cash Flow & Payment Report, construction businesses reported slow payments contributed to wasted resources (45%), reduced profit (41%), and failure to meet payroll (18%).
These cash flow challenges can cause detrimental results that drain the bank and negatively impact the amount of cash on hand. Add in slow pay, and you have a business in jeopardy of closing its doors.
Despite these issues, specialty contractors are still expected to meet project deadlines, with their businesses and reputations heavily dependent on timely completions.
At Levelset, we are interested in learning what the construction industry would look like if specialty contractors didn’t have to act like the bank to cover the material costs at the start of projects. Material Financing exists to make this a reality, providing financial flexibility and growth opportunities.
Levelset buys materials upfront from your supplier of choice who delivers them to the job site, and specialty contractors get up to 120-day payment terms. Having a financial partner provides breathing room when needed most because uncontrollable circumstances shouldn’t cost specialty contractors their livelihoods.
Empowered with Materials Financing, Polanco Business Solutions grew its business 30 times — $3 million in just three years. The company’s work spoke for itself and built its reputation. The CEO and team created a positive work culture while producing high-quality services. They just needed some cash flow support, and Materials Financing was the perfect partnership.
With this in mind, we ask, “What would your business look like with access to more capital and relief of cash flow stress?” It’s a future filled with possibilities, maybe one you haven’t imagined yet. Is it worth a try?
Get materials now. Pay when you get paid.
Enjoy 120-day payback terms with any material supplier.