the lenders, the sureties, the general contractors and owners). In the construction and building material supply trades, however, there must be a concern for the credit health of the underlying construction project and other parties on the project (i.e. Most businesses have to be concerned about their customer’s credit health.
Trade-specific rules for credit decisions Use Levelset’s Contractor Profile pages to stay up-to-date on recent lien filings and other indicators of payment issues. Generally speaking, you need to review a company’s credit history and worth when deciding on a credit line.įurther, you need to monitor that company’s credit because it can change during your relationship with them – sometimes quite surprisingly. Standard business rules apply to the construction and building material supply industries because companies in these industries are…businesses. Standard business rules for credit decisions If you’re extending credit to everyone that comes through the door your company is making a huge mistake.
The first thing a credit policy should do is set forth the customer qualification criteria. We’ve discussed the Lien Policy concept in the past, and it is simply a set of written guidelines to dictate how the company will preserve its lien and bond claim rights and under what circumstances they will execute them. There’s another component to credit policies in the construction and building material supply industries: A lien policy.
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