Construction Archive

Lien rights grant legal authority for contractors, subcontractors and suppliers to file a mechanic’s lien against the owner’s property or, in the case of a government project, the right to make a bond claim. It is also a security to force payment. But statutory changes like with Texas’ recent property code make it harder to protect those lien rights. In order to protect their lien rights, credit professionals must inform their customers of statutory changes immediately.

When lending to construction contractors, credit professionals should carefully review financial performance and cash flow. The main concerns of bankers are within areas related to how contracts are managed and how contractors expand their businesses. If suppliers who sell to construction companies are unable to receive the materials needed, it can delay projects and bolster costs. But with major shifts in the economy, such as high inflation rates, the delays in the supply chain have caused gross profits of contractors to decline 12%, said Dev Strischek, principal of Devon Risk Advisory Gro…

Construction input prices decreased 1.4% in August compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices fell 1.4% for the month as well.