3 Ways Contractors Can Manage Cash Flow Issues

Contractor writing down cash flow details to manage issues

Have you ever faced cash flow issues as a construction business owner? It’s a surprisingly common problem for general contractors to not be paid consistently or on time. How can you manage your business properly or grow without consistent and sufficient funds? The short answer is you can’t. There are some strategies that you can utilize to make sure your cash flow issues become a thing of the past, so you can move on and even grow your business. Here are three ways contractors can manage cash flow issues. 


One strategy to manage cash flow issues can come by making it a policy to incentivize clients to pay early. Oftentimes we hear of contractors who penalize late payments, but by then you already have a problem. By encouraging and offering benefits for early payment, you may be able to avoid the cash flow issue altogether.

Work with your clients to offer discounts for early payments. Just like you would tack on a percentage of interest once a payment becomes late, offer a certain percentage discount if a payment is early. Be sure to account for all of your costs, and don’t undercut yourself. Give that extra little nudge to make sure you’re receiving the cash flow you need when you need it. Build the incentive into your cost calculations. Soon, cash flow issues will be a concern of your past. 

Deposits and Payments 

Another way contractors can manage cash flow issues is through utilizing required deposits and payments. Work into your contract the expectation and absolute requirement that there should be an up-front deposit before any work begins. You have materials costs, overhead costs, and employees to pay, not to mention your own salary. A deposit ensures that your client is serious, invested, and able to put down at least some cash. It’s a wise strategy for ensuring that your cash flow follows through the duration of the job.

Another consideration to manage cash flow could be scheduled payments. It’s often difficult or impossible to estimate the final total cost of a project. However, you can require your clients to make payments on a certain schedule that covers the costs you’ve incurred along the way. A payment schedule also makes certain that you get the money you need in a timely fashion. Simply put, if there’s no money; there’s no project. 

Contractor Financing  

And finally the absolute best way for you to manage cash flow issues as a contractor is to provide contractor financing through HFS Financial. By providing contractor financing, you always know the money is there. You eliminate any guess work or questioning on your part because you’ve provided the perfect resource. It essentially makes your client a cash buyer and your life a lot easier. You can be a better contractor because you have the resources you need. 

So get that ball rolling and partner with HFS Financial to offer the best contractor financing for customers there is. Your clients will be able to keep the cash flow coming, and you can excel at what you do best. Let us find the perfect financing options for your client’s next home improvement project. With HFS Financial, “You Dream It, We Finance It.”

3 Ways Contractors Can Manage Cash Flow Issues

HFS Financial solely operates in the home improvement lending space which means we can confidently say that we are THE HOME IMPROVEMENT LOAN EXPERTS. When you apply at HFS Financial you will get a customized loan experience tailored to ensuring you get the best personal loan to meet your home improvement loan needs.