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• 30 Nov

  Factoring For Gangs Of Workers For Structural Steel Engineering

  

  Fortunately, we were able to assist a UK company that was in the recruitment sector, supplying gangs of workers to the construction sector. They needed non-recourse factoring to fund a major contract that they had secured from a substantial structural steel engineering firm.

  Our client was expecting to be turning over several million pounds each year providing temporary staff on a timesheet basis. This means that timesheets are signed off by the buyer after the gangs of workers have completed their contracted hours. This creates a provable debt, evidenced by an invoice raised to the end customer, that can be funded by a factoring company.

  Funding Gangs Of Workers For A Major Contract

  Our client had not been long established and had managed to land this major contract with a large structural engineering company. This presented them with the challenge of financing that major contract and the work that would be required. Often, a staffing agency will have to pay their staff before they get paid by their customer. This creates a "credit gap" that needs to be bridged with some form of funding.

  Structural Steel Engineering

  Structural steel engineering is the provision of the "skeleton" upon which many buildings and other constructions are built. The fabrication of a steel framework can give the building integrity as it supports the structure. Erecting this type of support structure requires a great deal of skilled labour.

  Non-Recourse Factoring

  To address the credit gap issue, non-recourse factoring was the solution that we found for them. This was provided by a large well-known factoring company that has won awards for their customer service. The facility means that our client can provide their gangs of contractors safe in the knowledge that they will be able to access the value of their invoices immediately. Factoring releases a prepayment against each new invoice as it is submitted for funding. It can also unlock a tranche of funding against an existing sales ledger of unpaid receivables.

  In addition, the non-recourse element of the facility provides protection against bad debt, should their customer fail. This can be very important when a company is dealing with a single large customer. Without a spread of debtors, protection against the risk of a single debtor failing can bring peace of mind. Providing the client trades within the customer credit limit set by the factoring company, their invoices will be protected under the non-recourse arrangement.

  By Glenn Blackman