Contract Financing Facility (CFF)

Southwest Credit is a non-bank national funder that uses a unique underwriting process to provide financing for contractors and sub-contractors. This process relies heavily on a company’s corporate capabilities and track record rather than primarily on their credit history alone. Southwest Credit’s objective is to become the leading provider of Contract Financing for small and middle market construction contractors.

This facility can be used on both public and private projects as a means of supporting local contractor participation on medium to large construction projects.

There are two main advantages to the CFF program:

• In-house underwriting capacity.
  
  

  This means that we control and administer the underwriting criteria used to determine whether or not a contractor is qualified to obtain financing. This in-house authority has enabled us to develop program protocols more appropriate for the small to medium construction market.

  For example, many contractors in our target market have the technical capacity to perform the work, but have some kind of financial capacity issue. We have been able to negotiate protocols which allow us to provide financing to financially-challenged contractors while still minimizing risk of loss or default.

• Costs of funds obtained through the CFF are significantly lower than the costs of funds charged by factoring programs. This enables small contractors to obtain the funds they need without sacrificing profitability.

This program is a good substitute for a revolving line of credit; however it is still based on the specific contracts that are part of the facility.

Stored Materials and Accounts Receivable Financing

Contract Financing is designed to help contractors take on larger projects and to successfully complete those contracts on budget. Contract Financing gives contractors confidence that they will have enough funds to cover their costs for supplies and equipment on a project all the way through to the end of that project. This facility includes funds for stored materials needed before actual construction begins, provided that an invoice can be provided for these materials as well as financing for approved invoices.

Secured Advances for the fulfillment of the contract(s)

As invoices are issued, 80% of those amounts can be advanced as per client request. The maximum amount of funds advanced at any time can not exceed 40% of the total contract amount.

Eligibility

Basically, any contractor that has been pre-qualified by an acceptable subcontractor assessment process (e.g. Subguard, GC Subcontractor pre-qualification or equivalent) can take advantage of this program. If you are not already so qualified, we will assist you through the process.

Approved contractors can receive secured cash advances of up to $2,000,000 per occurrence. Repayment of the advance does not have to come until invoices are paid by the contracting authority.

Overall Contract Financing Cost

By utilizing this facility, your overall contract financing cost may range from 1.5% to 3% depending on funds utilization.

Click here to see General Contractor benefits

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