The Costs of Customer Pushback Terms and Web Billing Portals

The practice of customer pushback on the payment terms offer by their vendors is forcing the hand of creditors. If they accept the longer terms demanded by the customer, it will be extremely difficult to return the terms to the previous level. If creditors deny the longer terms, they run the risk of losing their customer.It's the act of forcing the...
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Increased Fraud Schemes Threaten Government Projects

The Financial Crimes Enforcement Network (FinCEN) and Internal Revenue Service (IRS) Criminal Investigation Department issued a notice of attention to a notable increase in state and federal payroll tax evasion and workers' compensation insurance fraud in the residential and commercial real estate construction industries.Both payroll tax evasion an...
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Subchapter V Bankruptcy Becoming More Common

Subchapter V small business bankruptcies are up 43% year-over-year in August, the 13th consecutive month of increase. This upward trend is likely to continue through the rest of the year and beyond, said Andrew Behlmann, partner at Lowenstein Sandler LLP (Roseland, NJ)."Small businesses aren't able to go avail themselves of the capital markets to g...
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Statute Changes to New Mexico’s Mechanic’s Lien Law

New Mexico House Bill 179, signed into law by Governor Michelle Lujan Grisham, went into effect June 16, 2023. Under this new law, credit professionals must change the way they serve a copy of the recorded mechanic's lien to the owner for protection measures in New Mexico.Prior to this bill, New Mexico's lien laws did not require contractors to sen...
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Economic Uncertainties Continue to Impact the Construction Industry

Today's economic uncertainties are weighing heavily on the construction industry. For example, high inflation rates have caused higher construction costs. Supply chain and labor availability issues cause project delays, ultimately leading to a stunt in the growth of the construction industry across the nation. And despite the labor market's stabili...
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Bonding Off Liens: How Does it Work?

Bonding off, also known as "bonding around" liens, is a term used when a general contractor, owner or even in some cases, a subcontractor, are required to keep a property lien-free.A lender could make the requirements of a loan that the property be lien free. If anyone decides to lien the job, the lender could suggest or demand to bond around the l...
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Pricing Strategy: A Delicate Balance

Inflation slowed to 3% year-over-year in June, but commodity prices are still higher than they have been the last few years. As we learned during the pandemic, shipping delays and strong demand can send pricing soaring—and quickly. In order to mitigate risk when commodity prices increase, credit professionals must develop bulletproof pricing strate...
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Is Digital Currency the Future of Finance?

The rise of digital currencies could have a massive impact on financial systems, central banks and B2B trade as a whole. B2B payments have already come a long way from cash and paper checks with the rise of ACH and credit cards. Now many are wondering if the future of finance is based around digital currencies.A recent eNews poll revealed 9% of cre...
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Protect Your Lien Rights for Private Projects in Florida

Florida, like all states, has a construction lien statute for private projects so that trade creditors can protect their lien rights. But Florida is the only state with an additional form of protection for private projects called the Notification of Specialty Fabricated Materials. Specialty fabricated materials are materials manufactured specifical...
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Florida Changes Its Construction Lien Law

On June 12, Florida Governor Ron DeSantis signed House Bill 331 into law—which shortens the time period to bring defect lawsuits forward and modifies current private right of action against a contractor for violation of the Florida Building Code. The previous statute stated the time to commence an action began with the later of the date of actual p...
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Washington House Bill to Increase Bond Amounts

The new Washington State house bill passed on April 13, HB 1534, increases the required statutory registration bonds. The bill provides additional protection to trade creditors with increased oversight of contractors. "Under the current law, L&I can deny a contractor's application for registration if there is an unsatisfied final judgment again...
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NACM and the Birth of Credit Management: Celebrating 127 Years

On June 23, 1896, the credit profession as we know it today was born. America's credit managers heard O.G. McMechen's call to create a national association for business credit management, resulting in the formation of the National Association of Credit Men, which would eventually grow to become the National Association of Credit Management (NACM).I...
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Voices of Credit Congress: New Tools to Solve Old Problems

Credit professionals have an intrinsic thirst for knowledge. Education is power. And Credit Congress is the best event for trade creditors to attend best-in-class educational sessions all in one place, especially as the role of credit management constantly evolves.More than 800 trade credit experts from all backgrounds, industries and experience le...
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Commercial Bankruptcies Hit 2010 Level

Commercial bankruptcies have skyrocketed since the historical lows during the height of the pandemic. At 236 corporate bankruptcy filings so far this year, the number is higher than the first four months of any year since 2010 and more than double 2022 levels, according to S&P Global Market Intelligence. They forecast that the U.S. default rate...
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Refine the Lien Waiver Process

Over the past decade, lien waivers have evolved from a half-page, fill-in-the-blank form, to a lengthy legal document. But now, creditors have more trouble tracking what's been waived per project and some lien waivers are misleading and demand concessions. This, along with changes in statutory state laws, makes it all the more important that credit...
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What Type of Lien Is Best for Your Business?

The mechanic's lien laws we know today provide a legal claim on homes and other property filed by an unpaid contractor or material supplier. Liens are used primarily to collateralize a debt that is owed. Many different liens exist today, including tax liens, mortgage liens, UCC liens and mechanic's liens, just to name a few. Trade creditors are oft...
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Understanding Article 9 Restructuring

Under the Uniform Commercial Code (UCC), debtors have a variety of options to overcome insolvency. For example, an Article 9 reorganization is an out of court restructuring that sells the assets of the debtor company to a third party with the proceeds for the benefit the secured lender. Any residual balance of the secured debt remains with the debt...
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Material Shortages Threaten Completion of Infrastructure Projects

Manufacturers continue to struggle with completing projects on time due to the tightening of supplies such as cement—the second-most widely used material in the world after water. The aftermath of supply chain issues has caused inflation and shortages in not only retail-focused industries, but machinery and non-residential construction as well.Shor...
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Beware of These 10 Trigger Words in Construction Contracts

Trigger words are terms and phrases in construction contracts that heighten risk during a B2B transaction. Credit professionals must pay close attention to these trigger words to avoid additional costs, payment delays or nonpayment on a project.#1 Mandatory Arbitration ClauseLitigation is a lengthy process that often delays payment, which is how ma...
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Legislative Roundup: What Will Impact Trade Credit?

California Senate Bill No. 1235 (SB 1235) Does Not Directly Impact Trade CreditThe California Department of Business Oversight recently released regulations pertaining to the content and enforcement of SB 1235, which amends California's Financing Law (CFL) and sets forth disclosure requirements for "Commercial Financing Transactions."SB 1235 was co...
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