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Capital and Equipment Financing to Contractors and Builders

Written by Peter L. Mosca on Tuesday, 08 September 2009 7:00 pm
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There's no doubt that the construction industry has faced a major slowdown in the wake of the economic recession. As banks have put the brakes on much of their lending for new construction and remodels, they've reduced funding availability for construction industry professionals, dealing what's felt like a double-blow to contractors and builders nationwide. When one of the largest banking institutions exited the financial market in early 2008, many construction businesses felt the pain. Ever since, secondary-market funding options have been greatly limited, according to James Penny, founder and president of Compound Profit, a Texas-based franchise that provides funding solutions for businesses throughout the country, specifically those in the construction field.

“Certainly some asset-based lenders exist in the secondary market, however, if a contractor has the assets to back a loan, then it's possible to use conventional funding sources in the first place," said Penny. "While many contractors are caving, others are discovering creative funding solutions -- factoring is one of those. Unfortunately, many factoring companies are volume-driven and won't work with small- or medium-sized construction firms, which is where Compound Profit steps in. Our construction factoring service is ideal for those in this industry, and is backed by a comprehensive funding solution that enables companies to obtain working capital and even construction equipment without accumulating debt or sacrificing equity."

With national and international locations throughout North America, Compound Profit has broadened its reach, making it all the more accessible to the construction industry. Its 300 customer-service-driven representatives are highly skilled in understanding and facilitating the contractors' complex financial needs. With Compound Profit's support, the funding experience is highly efficient, reliable and professional.

“For years, we've been providing funding and offering factoring services to contractors and sub-contractors, so we understand their requirements and have developed appropriate solutions," added Penny. "Witnessing the current suffering within this industry has been painful, considering we're able to help so many. While our goal is provide immediate support through factoring and construction-equipment financing, we want these businesses to succeed in the long term, and offer the tools and services to ensure that they do." Perhaps a recent announcement by Trans Union may offer some light at the end of the tunnel. The average national mortgage debt per borrower dropped (0.86 percent) to $193,811 from the previous quarter's $195,500. On a year-over-year basis, the second quarter 2009 average represents a 0.59 percent increase over the second quarter 2008 average mortgage debt per consumer of $192,681.

“In its first quarter analysis, TransUnion reported a potential positive sign in mortgage delinquency rate trends. For the first time since the recession began at the end of 2007, the quarter-to-quarter growth rate for national mortgage delinquency showed a decrease," said FJ Guarrera, vice president of TransUnion's financial services division. "Now, with the release of second quarter results, we see even more deceleration in mortgage delinquency, an indication that the mortgage market is beginning to stabilize.

“There are several complementary economic statistics at the national level to support this guarded optimism, such as the increase in consumer confidence in the second quarter. As for the labor market, although unemployment had continued to rise through the second quarter, July figures for unemployment insurance were lower than expected. More good news reported include recent figures from the government show the unemployment rate actually dipping to 9.4 percent nationally in July. These encouraging economic signs, coupled with a decrease in the rate of mortgage delinquency growth, suggest that we may have seen the worst of the recession. “This is particularly noteworthy, in that delinquency statistics are generally lagging indicators of the economic environment," continued Guarrera.

[Editor's Note: Compound Profit is growing to 300 franchised locations across the United States and will employ 6,000 account executives. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning, www.transunion.com/business.]

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