Those higher capital costs are straining some contractors’ current lines of credit and driving up their financing needs, noted the veteran construction accountant.
“You may have bid for a project 12 months ago thinking your line of credit was only going to be at three or three-and-a-half percent interest, but now we’re seeing rates of up to six-and-a-half percent,” Baalman told the audience of general and specialty contractors. “We’re encouraging our construction clients to keep their overhead rates in sight and top of mind as they bid on projects.”
Head of Pinion’s construction and real estate group, Baalman boasts more than 22 years of experience in the industry. The Salina, Kansas-based firm (formerly KCoe Isom) maintains 22 U.S. offices, with a construction and real estate group serving contractors in California, Colorado, Washington D.C., Iowa, Indianapolis, Kansas, Missouri, Mississippi, Tennessee and Wyoming.