Using UCC Filings to Secure Your Transactions

Banks are the primary user of UCC Filings, and the financial institutions incorporate many of the credit principles such as the 5 Cs of credit—capacity, capital, character, conditions and collateral–used by trade creditors. However, when banks lend on commercial loans, collateral is often the most important, said Chris Ring, of NACM Secured Transac...
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Texas Attorney Prepares Credit Professionals for Statute Changes

With changes to the Texas mechanic's lien statute taking effect Jan. 1, Katy Baird, senior associate at Andrews Myers PC (Houston, TX), provides an in depth look at how subcontractors and suppliers should protect themselves.During a recent NACM STS webinar, Texas Lien Statute: Preparing for the Changes in 2022, Baird provided a summary of the chang...
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How to Make the Most of Your Insurance Coverage During Construction Projects

Insurance coverage on supplied materials and equipment can be an effective tool to protect yourself from potential loss during a construction project. During NACM's most recent construction think tank session, Jim Untiedt, partner and construction practice leader at Acrisure Construction, LLC, describes what types of insurance policies are out ther...
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The Latest in Today’s Supply Chain Horror Story

Persisting supply chain issues are turning into a real-life horror story for many businesses across the globe. While it is not entirely clear exactly how long the nightmare will last, experts are certain it will not end anytime soon. Earlier this week, the World Trade Organization (WTO) said during the FT Africa Summit that supply chain problems ar...
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Five Ways to Lose Your Lien Rights

One of the strongest ways to secure payment rights on a construction project is through a mechanic's lien. Contractors and subcontractors often "finance" construction projects with their work, which is paid for later. And like the banks that finance projects with money and secure their capital with mortgage liens, contractors, subcontractors and su...
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Ongoing Supply-Chain Issues to Constrain US Building Product Sales

Supply chain challenges in the U.S. building products and materials sector are taking longer than expected to normalize, limiting companies' ability to fully benefit from strong end-market demand and grow sales, says Fitch Ratings. The disruption is causing production delays, which have been exacerbated by ongoing port congestion, pressuring sales ...
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Aluminum Will Continue to Get More Expensive and Here’s Why

By now, creditors are well aware of the inflation and material shortages created by ongoing supply chain issues. However, as the prices and movement of some goods begin to normalize (like lumber), others are getting much worse.The price of aluminum has increased for 16 consecutive months, more than any other commodity—partly due to product scarcity...
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Contractors Find New Ways to Cope with Elevated Lumber Prices

U.S. commercial and residential builders breathed a sigh of relief last month when softwood lumber prices dropped more than 30% after reaching an all-time high in May. Although prices still remain elevated, they have come down to a more manageable level, experts told Construction Dive. These fluctuations in the price of lumber are related to the su...
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Rebuilding Process Slow Following Hurricane Ida

Louisiana and surrounding areas are continuing to deal with the fallout from Hurricane Ida, which ripped through the southeast section of the state in late August. Contractors in particular are facing challenges, amplified by preexisting supply chain issues and labor shortages, as they return to jobsites and begin the rebuilding process.U.S. indust...
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Washington Case Law Demonstrates the Importance of Understanding Lien Deadlines

Lien statutes have long been an effective leveraging tool for credit professionals looking to collect outstanding payments on a construction project. However, as a recent court case points out, warranty work does not extend the deadline to record a lien claim.A recent case, Brashear Electric, Inc. v. Norcal Properties, LLC, before the Washington Co...
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Why Construction Creditors Must Pay Close Attention to Change Orders

Construction projects do not always go according to plans and are often prone to delays or supply changes. When one of the parties to a contract requests changes to the agreement, a written change order is an effective tool to keep track of these changes; however, they must be carefully executed to ensure payment in a timely manner.A change order s...
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Iowa Court Addresses Notice of Commencement Issues in Residential Mechanic's Lien Case

In Borst Constr., Inc. v. Finance of Am. Commercial, Inc., 2021 WL 3661426 (Iowa Ct. App. 2021), the Iowa Court of Appeals addressed the following three issues under Iowa's mechanic's lien statute in a residential construction dispute: the applicable deadline for a subcontractor to post a notice of commencement; whether work performed by a subcontr...
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New Florida Law Increases Penalties for Certain Construction Late Payments

On July 1, Florida legislation that imposes stronger consequences on late payments throughout the construction chain for certain services took effect. The consequences outlined in Florida Senate Bill 378 include higher interest rates on past due payments and criminal charges for those suspected of misappropriating funds."The statute change was base...
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Prompt Payment Laws Can Bolster Your Chances of Collecting Payments

As a materials supplier, maintaining leverage over some of the higher ups within the contractual chain can be a difficult task. To help mitigate this issue, suppliers should consider all of the tools in their toolbox—including the Prompt Payment Act.The Prompt Payment Act allows suppliers to hold some parties accountable for failing to meet payment...
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Get Paid Through Construction Trust Fund Statutes

Contingent payment clauses like "pay-if-paid" can provide those higher up on a construction project chain with an unfavorable advantage over material suppliers when attempting to collect funds. Fortunately, construction trust fund statutes can help suppliers retain leverage despite these clauses and increase their chances of getting paid in full.A ...
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How to Maximize Your Benefits Through Joint Check Agreements

Agreeing to payment terms and then achieving those terms can be a challenge—particularly in the construction industry, where there are tiers of buyers and sellers. Sometimes general contractors will use joint check agreements to issue payments simultaneously to a subcontractor and its supplier. These agreements clarify the rights of each party rega...
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How to Maintain Your Rights When Exchanging Waivers for Payment

Lien waivers are a tool that can protect creditors and their customers, when they are used correctly. However, it is important to choose the right type of waiver based on the situation because the wrong choice can leave a collections team empty-handed.NACM's Construction Credit Think Tank, comprised of construction credit thought leaders, recently ...
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Missed the Deadline to File a Mechanic’s Lien? Here are Some Options

The best way for material suppliers and subcontractors to ensure payment if a debtor files for bankruptcy is by creating a lien ahead of time. As a general bankruptcy rule, in most states, liens that are filed or perfected post-bankruptcy-petition are not successful.But if a mechanic's lien was not filed properly, or not filed at all, that does not...
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Construction Startup Katerra Files for Bankruptcy, How Are Creditors Protected?

SoftBank-funded construction startup Katerra filed for Chapter 11 bankruptcy this week in the Southern District of Texas, leaving numerous projects unfinished, between $500 million to $1 billion in assets, and $1 billion to $10 billion in liabilities. The company blamed its downfall on a number of factors in a recent statement, including financial ...
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Analysis of Job information is Vital Before Starting Work or Supplying Materials

When it comes to assessing a customer's creditworthiness, information is king. Gathering the critical information upfront helps subcontractors and suppliers set limits, reduces the chance of nonpayment and helps secure lien rights."The security of mechanic's liens and payment bonds afford you greater flexibility in extending the lines of credit to ...
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