Case Study: Factoring Helps a Cell Tower Construction Company Grow

March 24, 2016

Growing Demands for Cell Tower Construction

With success come new demands for cell tower construction and maintenance companies. Companies need to ensure sufficient cash flow to meet increased demands in the telecommunications industry.

Telecommunications growth is not expected to slow down anytime soon. According to 4gamericas.org, LTE is the fastest growing mobile broadband technology on record. As of June 2015, 775 million LTE connections were recorded. It is predicted that by 2020, this number will grow to 3.6 billion. In a state of the RAN report, Amdocs reported that the volume of mobile data alone has been growing globally at a rate of 60 percent to 120 percent year over year. In North America, voice over LTE (VoLTE) has been deployed in over 70 percent of the networks, creating both opportunities and challenges as carriers confront issues related to quality of service as compared to circuit-switched 2G/3G.

Add to this the carrier movement to 5G trials expected to start in 2017 and new spectrum allocations. With this much growth and technology change in the forecast for telecommunications, cell tower construction and maintenance companies need cash flow solutions to fund their growing business.

Case Study: How Factoring Helped a Cell Tower Construction Company Grow

The Challenge:

A cell tower construction company had recently won several lucrative contracts. However, new success brought new demands for business resources such as additional employees and equipment. The company needed to ensure sufficient cash flow for the increased demands of business volume and could not afford to wait for payment, even with MSAs at net 30 or net 45. Although the cell tower construction company maintained a positive, working relationship with its bank, the bank was simply unable to accommodate the large credit line it needed. And to make matters even more challenging, a big carrier decided to move its pay terms out to 60 days, making cash flow even more tight.

The Solution:

Scale Funding provided an accounts receivable financing line to the cell tower construction company that enabled them to accept the new contracts and continue its expansion. Specifically, this line allowed the company to stay current on its payroll, pay outstanding payables to vendors and pay off the bank line of credit, all while retaining some operating cash. This new relationship with Scale Funding improved – rather than harmed – the company’s standing with its bank as they were able to maintain their deposit and payroll accounts.

“Our Partnership with Scale Funding provided us the cash flow we needed to take advantage of the business opportunities we were missing.”

The Result:

Today, the company’s growth continues as it prevails in successfully bidding on potential new contracts. The company’s cash flow is managed through its accounts receivable line, allowing the company to entirely fulfill financial obligations and commitments. The bank maintains a positive relationship with the company, deepening the long-standing rapport.

Are you a cell tower construction or maintenance company that needs cash flow to grow your business?

As outlined above, the telecommunication industry is not slowing down, and neither should your company. There’s growing need for services that include:

• Engineering and Planning
• Construction
• Installation
• Upgrades
• Maintenance
• BTS (Base Transceiver Station) Installation
• Power Services, Including Back-Up Power
• Trenching to the Tower for Power and Backhaul
• Decommissioning and Removals

Partner with Scale Funding to get the cash flow you need to be part of the telecom growth.