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With the money crunch for public projects, I have advocated that a great solution is more private-public-partnerships. The reason is there are huge amounts of a private capital seeking places to invest. Private-public-partnerships are a way to tap that resource while at the same time decrease the strain on federal, state, and local government coffers. It is important that we find methods to finance our infrastructure. Not investing in infrastructure increases costs to both business and individuals. Further, a healthy program of infrastructure projects would help provide high quality jobs.

With the money crunch for public projects, I have advocated that a great solution is more private-public-partnerships. The reason is there are huge amounts of a private capital seeking places to invest. Private-public-partnerships are a way to tap that resource while at the same time decrease the strain on federal, state, and local government coffers. It is important that we find methods to finance our infrastructure. Not investing in infrastructure increases costs to both business and individuals. Further, a healthy program of infrastructure projects would help provide high quality jobs.

The idea of bringing funds to the project is not just for public projects. One of the trends today is for homebuilders to find a source of funds that can be lent to the buyers of the houses they build. With the complaint that buyers are having trouble obtaining credit from conventional sources, it’s time for builders to seriously consider offering financing for their homes. This isn’t a crazy scheme, because renovation contractors and pool contractors have been doing this for years. This is critical because the country requires a healthy housing industry to have a healthy economy.

Commercial contractors need to start thinking this way also. Again it’s not a crazy idea. Back in the 1970’s I worked for a large general contractor. Our clients had little trouble getting funding from several loan sources because our construction estimate was consider reliable, which allowed lenders to accurately judge the financial soundness of the investment.

I’ve been stating for years that contractors need to get out of the building industry. That doesn’t mean they should stop building things. But they need to think of their business as solving problems that happen to require construction. For example, a family has a problem – they need a new home. The problem solving homebuilder considers not only building the house, but how to best design it to meet the family’s unique needs and then help obtain financing for it. Today some homebuilders are actually entering into partnerships with lenders to address this challenge.

The reality of the future is that contractors must focus on maximizing the value that they deliver to clients – meaning projects must examine not only the initial capital costs, but the entire life-cycle costs for the project. When lenders understand that the project built by a contractor does this, they will be more comfortable lending money on those projects.

The way the construction is going to rebound is by providing superior value for its clients. Helping them obtain funding is only one of many things that contractors can do to add value.

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