Defensive driving is a tactic that protects motorists. It saves lives and reduces the possibility of accidents. Mastering the skill puts you in the driver's seat, so to speak, to avoid obstacles and stay in control. Acquiring this prowess and self-awareness in other areas of life can be just as important, and it can provide similar protections. In the world of construction credit, that means staying on top of job information.

Wayne Kishbaugh, a NEDCO supply senior credit analyst, gathers the property owner's name and address, and the name and address of the general contractor at the start of a project. That way his team can begin the process for mailing notices within 30 days of first furnishing for Nevada private projects. It's important to build in time to gather job information and mail certified letters to the owner and general contractor, Kishbaugh noted.

Material suppliers must identify and verify the address of the piece of property where their materials are being installed, who owns the property and who the general contractor is, said Chris Ring, a NACM Secured Transaction Services representative in a recent webinar. This process is typically known as the gathering of job information.

Ring recommends using a job information form to capture the critical details that will support the use of a mechanics lien. "It's a template to gather information," he explained. It identifies the piece of property being improved, the owner and the role of the creditor's customer in the construction project. Companies may already have a form or one that needs updating, Ring said. For those companies that don't, he noted that they could reach out to him at This email address is being protected from spambots. You need JavaScript enabled to view it. to receive one.

Material suppliers must identify the property being improved, where the materials are being installed, the property owner, the general contractor and their customer, Ring noted. Suppliers are some of the last construction project participants to receive payment. Money to pay them has to funnel down from the property owner through the general contractor and subcontractor.

Complete and accurate job information also supports extending larger lines of credit, Ring said. For example, information contained in a credit application might qualify a customer for $5,000, but the purchase order is for $40,000. However, the information on the job information sheet could qualify the customer for much more based on the value of the property with the use of a mechanics lien. This is one way to turn a no into a yes, instead of denying a customer a line of credit, Ring explained.

Fallout from the COVID-19 pandemic has also led NEDCO to implement other strategies to mitigate nonpayment risks. A lot of business, comes from the casino industry, supplying to casinos for tenant improvements, Kishbaugh said. However, travel restrictions and closures at the onset of the pandemic impacted the industry and the ability to get paid.

"Accounts payable people were not always available during shut downs and closures," he said. "The AP team was furloughed except for the AP supervisor or manager or even the controller. Payments from casinos have seen delays, and some casinos are still not open."

The company now requests deposits on larger orders based on customer credit limits. "We're more cautious now when making credit decisions," Kisbaugh said. "Even though we have lien rights, we're asking for a down payment."

He said they also are doing more on the frontend when they receive credit applications. Recently, NEDCO had to write-off unpaid invoices for electrical equipment due to fraud from an entity claiming to be an out-of-state university. "We're doing our due diligence by asking for additional credit references and checking customer websites—extra steps to verify credit applications," Kisbaugh added. "We're calling customers to avoid fraudulent orders."

NACM's Secured Transaction Services will host a free 30-minute webinar on Nevada's mechanic's lien and bond claim statues on Monday, Oct. 12 at 3 p.m. Eastern. Register for the webinar here.

—Michael Miller, managing editor