construction project financing. The relevant literature,empirical practices, and factoring theories from outside the construction industry are all evaluated and the features of needed to derive the cost function are explored and integrated. A case study is utilized and discussed to illustrate the use of factoring for a construction project and its related costs. The results show that using factoring account receivables mitigates cash flow fluctuation around 50% for a $183 million New 本文来自辣.文-论-文-网原文请找腾讯324,9114 financial risk. Factoring is indeed a feasible financial tool for construction projects.
Index Terms ：factoring, accounts receivable, cost, financing,
construction project.
1. INTRODUCTION 物流客户关系管理体系构建研究+实施方案+应用保障
In the construction business the contractor needs to maintain a high volume of working capital. It is necessary to preserve a certain volume of working capital to deal with inevitable fleeting huge cash outflows. This can lead to financial burdens if payments from the owners are delayed or the set payment period is too long. The most commonly used way to resolve this type of problem is financing from banks. However this may be costly. Other financing alternatives are used to reduce cash flow fluctuation brought about discussions in the construction industry [1].
Factoring account receivables has successfully been implemented in many other industries but not for the construction industry. Factoring is globally accepted as a means of raising short-term capital for financial needs. It was derived from the US textile industry [2] and has spread out to over the last century to about 50 countries.
1Assistant Professor, Institute of Construction Engineering and Management,
National Central University, Jhungli, Taoyuan 32001, Taiwan. E-mail: jhchenncu.edu.tw
2PhD student, Institute of Construction Engineering and Management,
National Central University, Jhungli, Taoyuan 32001, Taiwan. E-mail: 943205005cc.ncu.edu.tw
Factoring services provide multiple benefits to including the reducing and transferring of credit risks, improving cashflows, lowering financial administration costs, and increasingefficiency and productivity [3]. The feasibility ofimplementing factoring for construction projects has not yetbeen discussed. To do this cost considerations from thecontractor’s viewpoint need to beexplored first.
Mitigating cash flow fluctuation using factoringaccount receivables in the viewpoint of a contractor is theobjective in this study. The focus is on the lump-sum type ofconstruction projects with fixed payment terms and periods.Account receivables forconstruction projects are defined asthe payment that the contractor will collect from the ownerwhen the correspondingwork 本文来自辣.文-论-文-网原文请找腾讯3249.114 subject to any penalty claim are also not included. The application and integration of the features of construction projects, the factoring concept, and the contractor’s costs for factoring, can are explained using mathematics and a case
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