SME Construction Sector Big Winner In Federal Election

 In Daily Column

Now there's a choice...

Now there’s a choice…

It hasn’t been a stellar year for the civil and construction sector. A combination of poor weather and a looming federal election has put a lot of projects on hold and slowed the issue of new contracts.

Irrespective of which party wins the Federal election, this sector should enjoy some movement, particularly at the big end of town.

For SMEs however, ($500K-$25m turnover PA) low cash reserves and stretched lines of credit will make tendering and completing projects an uphill battle.

I have not heard anything from either party or the banks to change this opinion.

However, some positive news is at hand, in the shape of a finance product purpose-built for small to medium construction companies – AR Project Finance.

Daniel Dunsford, Director, AR Cash Flow, contends that whilst government investment in infrastructure is long overdue the smaller end of town’s is not likely to enjoy any trickle-down effects for some time.

“I don’t think it’s a case of small contractors viewing the glass as half full or half empty. I think it’s a case of finding a completely different vessel, and I think we’ve delivered that with project finance for construction,” claimed Dunsford.

“In the past you needed cash to tender and then cash to buy materials, hire labour and equipment to commence works. You then needed even more cash to sustain work between progress payments. Our product can provide finance to initiate work as well as on approved claims within 48 hours,” continued Dunsford.

The premise of the product is that the financial security lies in the strength of the commercial or government body that issues and pays for the works, rather than the contractor’s ability to self-finance.

With entry and sustainability barriers likely to remain high post election, AR Project Finance could help reboot the small construction sector.

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