A solution for construction companies, suppliers, developers and technical offices

The construction sector is a complex ecosystem in which multiple actors interact: construction companies, material suppliers, real estate developers and technical offices (architecture, engineering, consulting). All of them face financial challenges that affect their daily operations and the viability of their projects.

Long payment terms, difficulties in accessing bank credit and the need to maintain a stable cash flow have led many companies in the sector to seek more agile and flexible financing alternatives. In this context, alternative financing has emerged as a key tool to guarantee liquidity and avoid interruptions in the execution of projects.

Each player in the sector faces specific financial challenges, but they all share the same problem: the lack of liquidity at key moments in the construction process.

• Construction companies: They are forced to advance costs for materials, labor, and equipment before receiving payment for work certificates. Delays in payments can affect their ability to complete projects on time.
• Material suppliers: They supply products with payment terms of 60, 90 or even 120 days, which forces them to finance themselves while they wait for payment.
• Real estate developers: They must invest large sums in the acquisition of land, licenses and works without receiving income until the sale of completed units, which generates a high consumption of capital.
• Technical offices and consulting firms: Professionals in architecture, engineering and other areas usually depend on payments for project milestones, which can generate imbalances in their treasury.

In an environment where bank financing is increasingly restrictive, it is essential to explore solutions that allow all these actors to access capital quickly and flexibly.

Alternative financing offers options adapted to each link in the construction value chain, allowing companies and professionals to better manage their cash flows.

1. Factoring : It is a solution that allows invoices and certifications to be converted into immediate liquidity, without the need to wait for their maturity.

• Builders and suppliers can advance the payment of work certifications or invoices issued to clients with long payment terms.
• Technical offices can use it to anticipate the collection of pending fees, avoiding delays in their operations.

For example, a materials supplier who has delivered products to a construction company can sell their invoice to a factoring entity and receive payment within 24-48 hours instead of waiting 90 days.

2. Confirming : Allows companies to pay their suppliers through a financial institution, which offers the possibility of advancing payment before maturity.

• Builders and developers can improve their relationships with suppliers by guaranteeing timely payments.
• Suppliers of materials can opt for early payment and improve their liquidity without going into debt.

This system benefits the entire supply chain, as it allows the workflow to be maintained without interruptions due to non-payment.

3. Alternative credit lines and flexible financing : Specialized platforms, such as Novicap , have developed credit solutions designed for the construction sector. These financing lines allow:

• In construction companies, cover liquidity needs to complete projects without depending on banks.
• For developers, obtain bridge financing until the sale of properties.
• For suppliers, access to working capital without the need for additional guarantees.
• In technical offices, balance your cash flows without having to resort to conventional loans.

To learn more about the role of alternative financing in construction, we consulted Marc Santander, Head of Sales at Novicap, a company specializing in non-bank financing solutions (Factoring, Confirming and Loans), who explains:

“More and more companies in the sector are turning to Factoring and Confirming solutions to optimize their liquidity and reduce their dependence on bank credit. This allows them to operate with greater stability and without the restrictions of traditional financing.”

In addition, he shares with us the case of a developer who was able to complete the construction of a residential development without delays thanks to the advance of certifications, thus ensuring the delivery of homes within the scheduled period.

Alternative financing has become an indispensable tool for the construction sector, offering specific solutions for construction companies, suppliers, developers and technical offices.

Faced with the rigidity of bank financing, tools such as factoring, confirming and alternative credit lines allow access to liquidity quickly and flexibly, guaranteeing the continuity of projects and the financial stability of all parties involved.

In an environment where cash flow management is critical, having financing options tailored to the needs of each company is key to success in the construction industry.