Funds Administration Services, Inc. (FASI) opens window of opportunity for Glass Structures Limited.
Specialty Glass is Risky Business
Glass Structures Limited is a specialty subcontractor that designs, manufactures and installs custom aluminum and glass structures and skylights. It is a $4 million company with construction projects worldwide, including the skylights for the Holocaust Museum in Washington, D.C. and glass wall structures for a large hotel in Izmir, Turkey. Because of the intricacy, craftsmanship and the high level of specialty involved with this type of work, Glass Structures Limited was a high-risk bond because few subcontractors could replace the company on the Arlington National Cemetery job. "This project included a highly complex and unique design, and a partial sponsorship by the United States government added to the importance of the project," said Jack Greenberg, president of Glass Structures Limited. "Funds Administration Services, Inc. came highly recommended to us by our bonding company."
FASI helped Glass Structures Limited secure the necessary surety bonding by acting as a money management service, or escrow agent. In turn, they allocated the money received from the contractor to the subcontractor on a work-progress basis.
Like many subcontractors, Greenberg found himself in unfamiliar territory when it came to securing bond credit. He was unsure of what to expect, fearing that the process might create more work than it would eliminate.
"Not only did involvement add a considerable amount of financial credibility, but FASI also made it much simpler to obtain all the materials and services needed for the job," said Greenberg. "They helped us avoid the long, drawn-out payment negotiation process by allocating all funds to our suppliers."
"I was pleasantly surprised. In fact, it eliminated paperwork and made my job much simpler," remarked Greenberg. "The monthly documentation was logical and simple, and all funds were disbursed quickly," he added.
"We helped Glass Structures Limited understand how sureties act and react under certain circumstances," said David Strauss. "Additionally, we were able to help negotiate aggressive credit terms, which in some cases could lead to significant discounts for the subcontractor upon payments made at the time of delivery."
Confidentially representing numerous surety bond companies, bond agents and general and subcontractor clients, FASI provided innovative and reliable credit enhancement tools that were used in qualifying subcontractors to expand work volume quickly and stretch financial lines of credit to larger projects. This is done by minimizing, if not eliminating, some of the surety's criteria for items such as capital injection, loan and subordination, joint-check ventures, higher quality financial statement presentation and collateral.
For a brochure or more information, call 800/327-2503 or visit the company's web-site at www.fundsadministration.com
Editors' Note: The opinions expressed are the authors and do not represent those of NACM nor of Business Credit magazine.
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|Date:||Apr 1, 1999|
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