Why Steel and Lumber Are Volatile
Global conflict and supply chain disruption have driven steel and lumber prices up and made them volatile. Bidding a job with today’s material cost can leave you exposed if prices jump before you buy. Construction financing and contract terms can help manage that risk.
Financing Strategies
Use working capital loans to cover material deposits and upfront costs when you need to lock in supply. Equipment financing can free up cash for materials by spreading equipment costs over time. Progress billing and payment terms that match your material purchases help avoid cash flow crunches. See material deposits and supplier COD for how to handle upfront material costs.
Change Orders and Escalation
Include material escalation clauses in your contracts where possible. When prices rise beyond a threshold, change orders can capture the increase. Document cost increases and communicate with the owner early. That protects margins when steel and lumber spike mid-job.
Working Capital and Equipment
Working capital loans can fund material purchases when you need to buy before first payment. Equipment financing preserves cash for materials. Combine with progress billing so you’re not carrying the full job cost out of pocket. Get matched for construction financing options.
Final Thoughts
Steel and lumber price volatility from global conflict makes bidding hard. Material escalation clauses, progress billing, working capital, and equipment financing can help. Get matched with lenders who work with contractors.