Amid the COVID- 19 outbreak worldwide, construction businesses – just like all major industries – have been at the receiving end of a cramping cash crunch right now. The current economic environment and the impending recession are acting as a significant barrier to business survival. While the lockdown is preventing contractors from working, the delayed execution of the supply chain is making matters even worse.
Here are a few things you can do to keep your business afloat.
Raise a Considerable Cash Cushion
Try to draw out cash from slow-paying assets and do not hesitate to opt for working capital loans. Moreover, global firms should also look for getting overseas cash stuck with foreign subsidiaries. Adjustment of cash-flow strategies to draw the most out of revolving credit, loans, and cash reserves is the need of the hour right now.
Get Serious About Payments
While it is highly probable that there will be delayed transactions, it makes sense for you to take note of your lien deadlines and be prepared before your cash problems affect your business. Also, filing a mechanics lien or forwarding a notice of intent to lien for payment drags on jobs would be a significant step.
Prepare for Contractual Obligations & Legalities
Perform a detailed analysis of active jobs and contracts. This will help you prepare notices for tasks that have been delayed or if assets/materials have been affected noticeably. If feasible, formulate new agreements citing the present situation. It would also be advisable to consult with a construction attorney to take care of all the pending legal issues.
While the business survival in this coronavirus outbreak is difficult, the construction industry is seeking to declare COVID- 19 as ‘force majeure,’ that facilitates the extension of project registration granted so far.
As the crisis unfolds, companies are expected to be jolted on several fronts. Therefore, how the subcontractor market fares during these tough times will determine the industry’s future in the long-term and the overall recovery.
Interested in staying up to date with all the latest construction trends? Contact your Oakland contractor at Proforma Construction. Serving Pleasanton and the surrounding California area, our highly-trained team is ready to make your commercial construction dreams a reality.