Jeff Switts, President of Kenyon Construction, Inc., knows that steady cash flow is essential to getting work done as well as keeping clients and accepting new business. During peak construction season, he was faced with the challenge of a lack of cash flow due to slow paying customers, even with invoice terms of 30 days.
Jeff needed a way to stay on top of the cash he was putting out during these peak seasons so he could continue to accept new work from his largest customer. His solution to this challenge? Invoice factoring with UC Factors.
Kenyon Construction, Inc. is a small-scale construction company based in Georgia. The business size allows Kenyon Construction, Inc. to stay current with construction industry trends - at the time they are mainly specializing in decks for the mobile home industry for low income or affordable housing.
The company receives the majority of their business from one multi-billion dollar construction company and is contracted to produce construction for their prefab homes. While Kenyon Construction, Inc. does also provide smaller services to private homeowners or similar sources, their main source of business is being a preferred vendor for the larger construction company.
Kenyon Construction, Inc.’s Challenges
Before partnering with UC Factors, Kenyon was facing cash flow challenges - particularly during the peak home building seasons in the spring and the fall. During these peak periods, Jeff was finding he needed to have a large amount of invoices out at any given time.
“During peak seasons, it was difficult to keep up with the amount of projects our main customer was providing; we didn’t have the cash flow to keep up with the amount of cash out and so we weren’t able to run as fast and as hard as our customer needed.”
-Jeff Switts, President, Kenyon Construction, Inc.
This was a challenge for him because in order to complete the work he was bidding on, he needed to hire excellent and reputable contractors and subcontractors. These workers, however, were not in the position to wait for their payment, which was difficult when Kenyon Construction, Inc. was waiting for payment from their customer’s outstanding invoices.
Another challenge this lack of cash flow presented was that Jeff was not able to take on the amount of projects he would like from his main client. Turning down projects put Kenyon Construction, Inc. at risk of being removed from their main client’s preferred vendor list altogether, which would have been detrimental to Jeff's business.
“Our main customer would have a lot of different vendors for their projects if one vendor was unable to take on a job and I didn’t want to have to give up being a vendor for them just because I didn’t have the cash flow to take on a project during their peak season.”
As Jeff was looking into solutions for cash flow, he investigated a home equity line of credit and business credit cards. However, he felt that the risk of having his home and his business on the line was too high. He also wanted to avoid credit cards due to both the higher interest rates and the impact his debt to income ratio would have on the company.
In order to keep up with the projects offered by his main customer and continue to pay his contractors for their work, Jeff was in need of a solution to his outstanding invoices and cash flow challenges.
The UC Factors Solution
Jeff was familiar with the concept of invoice factoring and in his research, another contractor in his area recommended UC Factors. He was drawn in by their low fees and decided to partner with them when he realized the level of service he would receive while working with them.
UC Factors offered invoice factoring at a low cost to him and he appreciates the level of responsiveness, industry knowledge, and availability he received from them.
“UC Factors works really hard every day to earn my business and I appreciate the level of industry knowledge and service I got from them in the beginning and now as I continue to work with them.”
After working with UC Factors to factor his invoices, Jeff was able to pay his contractors and subcontractors at the end of every week.
He also found he was relieved of his previous duties of chasing down late payments or collecting on invoices, which gave him more time to focus on other areas of his work or be in the field.
“Having factoring enabled me to pay my employees and subcontractors at the end of the week very easily with low stress on me.”
Because of the opportunities provided by partnering with UC Factors, Kenyon Construction, Inc. was able to not only have increased cash flow, but also take on more projects with their main customer and not risk being passed over for another company.
As UC Factors continued to partner with Kenyon Construction, Inc., they were able to accept more business from their main customer. This was beneficial especially during the peak seasons when they previously had to turn down some of the projects, which gave them a competitive advantage over other vendors.
“Having the extra cash flow enabled me to do a lot more work with my main customers. The small fee you pay for factoring was significantly outpaced by the increased profit margin I was able to obtain by doing more work.”
Another one of the main results Jeff saw after partnering with UC Factors was that not only was he able to take on more projects, he was able to take on larger scale projects from his main customer. This included renovations of clubhouses and more, which often times took an upwards of two months to complete.
Previously, he was unable to take on these projects because he couldn’t have his invoices out for 2+ months without seeing a payment. But, once he partnered with UC Factors, he could simply factor these invoices and have the cash to continue to work on these larger projects and still pay his contractors and employees.
“Partnering with UC Factors really allowed me to not only have increased cash flow, but I also was able to take care of my customer better so they were happy and I was happy too.”
Moving forward, Jeff’s goal is to continue to take on more projects from his main customer. He also has another customer in the works to factor, which will allow him to grow even more due to the increased cash flow he has from working with UC Factors.
Jeff plans to continue to partner with UC Factors and finds that the longer he works with them, the easier it is for him. He appreciates the fact that they are easy to work with and easy to get a hold of whenever he needs them. He also likes the availability of online tools UC Factors offers to make the entire invoice factoring process as easy as possible for him.
Jeff knows that his partnership with UC Factors allows him to not only see increased cash flow, but also allows him to represent himself well as a company.
“As a business, you’re only as good as the people you partner with and partnering with a quality company like UC Factors allows me to put my best food forward.”
He knows that the increased cash flow he sees from invoice factoring is worth any small fee charged because it allows him to take on more projects as well as larger projects, which keeps him and his main customer satisfied.
Are you interested in learning more about invoice factoring with UC Factors? Contact us today for more information and a no obligation consultation to see if invoice factoring is the right fit for your business.