In 2021, like many other industries, the construction industry was faced with unprecedented challenges such as labor shortages, astronomical increases in the price of materials, and shaky contracts due to economic disruption. With uncertainty at an all-time high, many construction businesses are struggling to protect their business and their bottom line from these financial hits. United Business Funding can provide small business financing to businesses in the construction industry to help insulate their financials from suffering in the long term.
The Reality of Cost Increases
There was a 20% increase in the price of construction materials in 2021 alone, and that number doesn’t seem to be receding quickly. While different materials increased at varying rates, a 20% increase in costs across the board means that construction companies need even more capital than before, in what was already a high-capital demand industry.
Since many projects are not paid out until completion, these price increases created insurmountable obstacles for many – and these aren’t the type obstacles you can just build a bridge over. UBF understands this dynamic is challenging, which is why we provide loans quickly to get your projects more capital fast.
Consumers Feel the Burden
The cost of construction projects always has multiple variables at play, but with such a steep price increase, many contractors are seeing projects get called off unfinished or are unable to lock in price guarantees, making the market even more difficult to navigate for buyers. While UBF can’t lower the price of materials for you, we can help keep projects afloat with cash injections as well as help you recover from expected earnings that were unrealized due to a customer’s financial limitations.
Nearly every industry in the U.S. is facing a worker shortage. Employers are struggling to find skilled laborers who are willing to work for the available wages. There is more competition in the hiring market than there has been in years, so businesses are looking at raising wages or offering bonuses to make their roles more lucrative to potential employees.
Trade industries, such as construction, seem to be feeling this pressure heavily. With a demand to offer increased wages, in a time when other overhead costs are soaring, a small business loan is the perfect way to tide your company over, hire the right talent, and get through these hard times.
Market Outlook is Positive
While things may seem grim right now, there is some good news on the horizon for the construction industry. With the passing of the infrastructure plan in the United States, 2022 and beyond will show a massive uptick in civil projects and government contracts. There will be no shortage of available projects to work on, but that doesn’t remove challenges with labor shortages and material increases.
Additionally, though the cost of materials has jumped, the demand for residential construction is booming. Business Insider estimates that the industry will need 2 million more workers over the next three years to keep up with housing demands. Pulling this number of laborers in will require lucrative hiring packages, meaning your business needs capital at the ready.
Partner with United Business Funding
This journey might be bumpy, but UBF is ready to help your business reach its goals and come out on the other side. Business financing can sound daunting, but cash flow is what you’ll need to get through the market demands, and cash flow is what we offer. With our programs, you can get the funds you need in as little as 3 days after approval. We work with you to set flexible repayment terms that fit your business needs and cash flow. UBF isn’t just another lender, UBF is your partner. Contact our team today.