Market Niche Insider – Down but not out – How to assess construction companies during a recession
Abstract: In uncertain times, it’s important that lenders investigate what stopgap measures their clients have taken to stay afloat. Besides cutting back materials scrap and overhead costs, or even personnel, contractors can trim the fat by converting fixed costs into variable costs. It’s also important to check a borrower’s job-costing methods and frequency, and to review their monthly “completed jobs” and “jobs in progress” reports to evaluate performance. Finally, it’s important that the contractor not overlook potentially lucrative change orders.