With New Home Constructing Rising Building Supply Companies Must Remain Vigilant

With New Home Constructing Rising Building Supply Companies Must Remain Vigilant


Covid-19 Pandemic Causes Need For Changes In Business

The coronavirus pandemic has changed the way that all businesses are run. Health and safety protocols are at an all-time high, while social distancing must also be enforced. In terms of the construction industry, these new regulations have become a bit of an obstacle to overcome to keep buyers happy.


Mortgage Rates Drop Drastically, Increased Need For Lenders

Mortgage rates have been at an all-time low, which has created an influx of buyers in the new construction field as well as those wanting to refinance their current homes. This has kept financial advisors, banks, and lending institutions busy. Before the pandemic, a borrower’s finances would be verified, and the loan process would continue. With the new risk of becoming furloughed, laid off, or even let go, lending institutions are doing another check on employment just 72 hours before closing on any type of loan to ensure funds are available.


Buying A Used Home Poses Some Health Risks

Buyers are not opposed to touring existing homes and purchasing used homes, but they are more cautious. Germ awareness is on the rise. Virtual tours have become quite popular, but for used homes, it is important to also view the home in person. It is difficult to buy a home that someone else is living in without visiting it. What if the person smokes in the house? The virtual tour will not show that. What if the tour leaves out cracks or structural issues? In-person tours can be scheduled, but proper safety precautions such as foot coverings, gloves, and masks must be used to ensure germs are not spread or picked up from home. These extra precautions have caused a need for new construction. Buyers don’t need to worry about the extra precautions.


New Construction Is On The Rise During COVID19

With the rise in new construction needs, the building supply companies must remain vigilant. Builders have ordered cabinets, and then a COVID outbreak occurs at the cabinet distribution plant. This causes the plant to shut down and the cabinets to not be sent. The builder still needs cabinets for their buyers. In some cases, the buyer may be patient and understanding. In other cases, the buyer may want that cabinet order canceled or simply refuse to pay and want to find cabinets elsewhere.


Suppliers Must Take Precautions

Supply companies must perform employee checks to maintain safety while distributing needed supplies to builders. Because the need is so great for both builders and supplies, there has been an influx in new startup businesses. The pandemic has closed the doors on some family-owned businesses but opened the doors for other entrepreneurs that stepped up to meet the supply and demand standards in construction.


Precautions To Ensure A Safe Work Environment

  • Employee temperature checks at the start of each shift
  • Employees must maintain social distancing when possible
  • Proper protective wear must be utilized
  • Hand washing and antibacterial use is encouraged
  • Employers must be understanding to employees using sick days if they are not feeling well
  • Distribution plants and building sites should operate with only 25%-50% of typical workers

New Construction Businesses and Suppliers Are On The Rise To Meet Building Demands

New construction and supply businesses in the workforce pose a risk to financial institutions. While many hope that in a perfect world, these companies will not default and practice good business strategies, there is always a risk that the startup will fail and default. If the new builder supply company cannot meet the demand, fulfill orders, or even make loan payments, some steps can be taken in the debt collection process.


Construction Falls Victim To Debt

Construction companies are one of the hardest hit when it comes to debt ratios. Nearly half of the assets in the building company is lumped into the building materials alone. This is why only about 47% of construction companies can stay afloat after four years.


Debt Collection Agencies Collect On Many Aspects Of Construction and Building

Debt collection agencies are not used just for forgotten utility bills or credit card payments. This is what most people think of when they hear about debt collectors. Construction and building collection agents have a thorough understanding of the construction industry. These representatives know that nearly half of the builder’s assets are tied up in their equipment and supplies alone. They work with the builder to see if payment plans can be made or if bankruptcy is a likely option.


The building companies that can stay afloat may be experiencing payment defaults from vendors for work performed. With the cut in employees able to work and the demand for new builds, the office staff is simply overwhelmed and does not have the time to stay on top of collections from these suppliers. In these cases, a collection agency representative will be able to handle the process and ensure funds are collected and distributed to the construction company that may be seeking payments for unpaid work orders. These agencies don’t get paid unless they can collect it takes the risk away from the builder and allows them to focus primarily on building and meeting the demands of their clients.