Financial Solutions Champion for Construction Businesses

March 16, 2024
3 Minutes
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In this interview, Scott Peper, CEO of Mobilization Funding talks about how they help the construction industry with their special financial solutions. The construction industry often struggles with getting working capital and dealing with complicated billing cycles. Mobilization Funding work closely with their clients, making them different from regular banks and loan companies.

Mobilization Funding Strategy

Mobilization Funding's strategy is based on a thorough knowledge of the unique financial aspects of the construction industry.

Scott emphasizes, "We're really good at assessing a company's ability to do what they do, see what kind of capital needs they have and that work in progress or progress billing, or do all this work, then deliver it before your service or good is delivered and then you're paid".

By evaluating contractors' operational workflows and aligning short-term loans with the industry's specific billing cycles, Mobilization Funding bridges the financial gap that often hinders project execution.

Mitigating Risks

Construction financing is inherently high-risk, but Mobilization Funding employs several strategies to mitigate these risks.

Scott acknowledges, "I can tell you it is high risk in terms of traditionally looking at it...We're really good at...helping finance that actual revenue cycle".

The firm conducts thorough risk assessments, considering factors such as a company's track record, project viability, and market conditions.

Moreover, Scott emphasizes that they "take the time to understand what someone's actually trying to accomplish", fostering a partnership approach rather than a mere lending transaction.

Empowering Clients

Mobilization Funding goes beyond simple lending by providing clients with tools and services to enhance their financial knowledge and effectively manage cash flow.

Scott highlights that they offer "tools that actually give them the added value of information prior to them ever having to make a decision".

By proactively engaging with clients and offering data-driven insights, the firm helps contractors accurately forecast financial needs and strategize accordingly, ensuring fiscal health and project success.

Accommodating Unique Billing Cycles

The lending process at Mobilization Funding is meticulously designed to accommodate the construction industry's distinctive billing patterns.

As Scott explains, "It could be milestones. Very often, it's actually a monthly billing that you can put together. It just requires more work and effort up front, and you can only invoice at the very end of the month or middle of the month".

By synchronizing funding with project milestones or monthly billing, contractors receive the necessary working capital without the burden of immediate repayment.

The impact of Mobilization Funding's lending model is evident in the success stories shared by Scott.

He refers to instances where clients were able to handle project scales they had never encountered before:

"So they might be doing similar projects, but their business is growing and it's at a pace they've never had it at before...They're doing five and six projects at a time and they're used to doing two or three".

These examples underscore the significant role of strategically-timed financial aid in spurring growth and enabling contractors to seize new opportunities.

Adapting to Industry Evolution

As the construction industry evolves, Mobilization Funding ensures its lending practices remain in sync by staying informed and adaptable. Scott touches on this adaptability when discussing market understanding, stating,

"You also have certain scopes of work, certain industry types that are doing really, really well. And so you need to understand where you're at both geographically and industry and type and scope of work".

By staying attuned to the changing needs of contractors, the firm continuously refines its financing solutions to provide ongoing support and stability.

Challenges and Ethical Practices

Scott acknowledges that the alternative finance lending market, particularly in construction finance, is not immune to broader economic challenges.

He states, "We're not agnostic to some of the pains of the economy and pressures".

To address these challenges, Mobilization Funding carefully balances flexible lending with prudent risk management. Additionally, Scott emphasizes the importance of maintaining ethical practices and prioritizing the well-being and success of clients:

"You should partner with the customer... you can't make it about you first and then see how you can make your best effort to get paid back from a customer".

Future Outlook and Advice for New Lenders

Looking ahead, Scott envisions a future where alternative finance plays a pivotal role in supporting the construction sector and infrastructure development through collaboration and partnership between lenders and contractors. For new lenders entering the alternative finance space, particularly in construction financing, Scott's advice is clear:

"stay in your lane...and even if you raise a bunch of capital or you have access to a bunch of capital, it's not about just putting it out, like put it out in places that you understand".

This guidance underscores the importance of specific market knowledge and risk management for success in this niche sector.

Mobilization Funding's approach to construction financing stands as a testament to the power of industry expertise, adaptability, and a customer-centric philosophy. By bridging the financial gap and empowering contractors with the tools and support they need, the firm is not only fueling growth but also shaping the future of alternative finance in the construction sector.

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