pro-forma payments
Discussion
I have a subcontractor (not nominated) who is demanding 100% payment (160k) upfront for supply and installation of toilet cubicles vanity units for a contract we have on at the minute.
Now I do sympathise with there position as we a new company (8months) and as such have no trading record, but I have asked for a compramise at 50% upfront 25% on delivery and 25% on completion.
Am I being unreasonable?. The funding isn't a problem we have the cash to pay out but I feel thats not the point.
I was wondering could I ask my bank to act as guarantor to the subcontractor if I allocate the funds which in turn could be released by the project c/a.
Any thoughts appreciated.
cheers
Steve
Now I do sympathise with there position as we a new company (8months) and as such have no trading record, but I have asked for a compramise at 50% upfront 25% on delivery and 25% on completion.
Am I being unreasonable?. The funding isn't a problem we have the cash to pay out but I feel thats not the point.
I was wondering could I ask my bank to act as guarantor to the subcontractor if I allocate the funds which in turn could be released by the project c/a.
Any thoughts appreciated.
cheers
Steve
£160k for cubicles and vanity units!!! what are you fitting out, a stadium?
it's not armitage venesta is it?
if so www.yell.co.uk
it's not armitage venesta is it?
if so www.yell.co.uk
sleep envy said:
£160k for cubicles and vanity units!!! what are you fitting out, a stadium?
it's not armitage venesta is it?
if so www.yell.co.uk
4000sq ft shopping centre facility, Obviously a high spec but it does seem a lot of money to me. Not AV my experience with these people is poor I,ve been involved with at least three projects (not directly) and not one of them has passed without incident.it's not armitage venesta is it?
if so www.yell.co.uk
[quote=s,one]
Well that answers your question.sleep envy said:
£160k for cubicles and vanity units!!! what are you fitting out, a stadium?
it's not armitage venesta is it?
if so www.yell.co.uk
4000sq ft shopping centre facility, Obviously a high spec but it does seem a lot of money to me. Not AV my experience with these people is poor I,ve been involved with at least three projects (not directly) and not one of them has passed without incident.it's not armitage venesta is it?
if so www.yell.co.uk
Three projects already have had issues and they want £160k up front.
Put it this way, if you were a director of a Ltd Co which is on the rocks winding up is a hassle. Being £160,000 just 'absorbed' into the Ltd Co when you wind up might make it sweeter...
I am not suggesting that they are the kind of company who would do that, what I am saying is that if you see that whole £160k again, will that scupper your business?
What are your other options? If you have them, tell them *your* payment terms. I don't think any constructor is going to turn away money at the moment. Having it in full on completion is better than not at all.
maybe dealing at a small business level it's all different but i had to read this 3 times to make sure i wasn't missing something !
As a small supplier/ installer (blinds) i find it hard enough sometimes to get 33% deposit & a balance paid within 2 or 3 weeks !
why would anybody need 100% in advance if they have suitable working capital ?
As a small supplier/ installer (blinds) i find it hard enough sometimes to get 33% deposit & a balance paid within 2 or 3 weeks !
why would anybody need 100% in advance if they have suitable working capital ?
In the current climate, especially in the construction industry we are refusing to pay any contractors pro-forma purely due to the fact of the number of companies folding at the moment.
If he's not nominated surely there's an alternative who will work on at least 30 days from end of month. Whilst you may have to pay slightly more, to me it would be worth it for the peace of mind.
Alternatively could you request some form of personal guarantee from the company MD covering you in case the worst did happen ?
Who is the order with out of interest (just being nosey) ?
If he's not nominated surely there's an alternative who will work on at least 30 days from end of month. Whilst you may have to pay slightly more, to me it would be worth it for the peace of mind.
Alternatively could you request some form of personal guarantee from the company MD covering you in case the worst did happen ?
Who is the order with out of interest (just being nosey) ?
We don't deal with anyone who we can't get good credit ratings on (50k+). Anything below and they're pro forma or at a push 1 in 1 out (anything over around 30k). That is a no compromise either.
With the current climate we've had loads of our limits pulled, cut etc by our credit insurers. Also, most applications are being referred to underwriters and it's taking a bloody age for a decision to be made. Not good when you have orders from said companies sitting on the table waiting to be passed through.
Can you not file any accounts whatsoever? Ask the details for the credit insurers your supplier is using and speak to them and find out what information they need.
With the current climate we've had loads of our limits pulled, cut etc by our credit insurers. Also, most applications are being referred to underwriters and it's taking a bloody age for a decision to be made. Not good when you have orders from said companies sitting on the table waiting to be passed through.
Can you not file any accounts whatsoever? Ask the details for the credit insurers your supplier is using and speak to them and find out what information they need.
You should be able to do something like CAD or a Letter of credit through the bank.
If you have the funds in place the bank will allocate the funds so you can touch them and give your supplier a guarantee that if he meets all the criteria ( quality, schedule ) that you have both agreed on then he gets paid and you get the goods.
Any kinda payments terms can be written into the agreement, In theory you should both be safe.
If you have the funds in place the bank will allocate the funds so you can touch them and give your supplier a guarantee that if he meets all the criteria ( quality, schedule ) that you have both agreed on then he gets paid and you get the goods.
Any kinda payments terms can be written into the agreement, In theory you should both be safe.
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