Risk 1: the risk of financing for advances
A part of the funds used by the contractor for advances may be its own funds, and the other part is usually through loans. Loans will have to bear the interest, if overdue can not repay the loan, but also bear the late penalty interest; and interest, penalty interest itself increases the burden of construction enterprises. If in a certain period of time the country's financial policy has a large adjustment, such as a substantial increase in bank lending rates, the contractor's bank interest and late penalty interest will also increase, thus constituting a greater risk.
Risk two: the risk of credit materials, equipment
In the case of advance construction, the contractor in order to speed up the schedule, or at least not delay the schedule at the same time, to minimize the capital investment, often through the credit materials, equipment, the practice of saving money in the early stage. In this way, not only is it sometimes difficult to guarantee the quality of the materials and equipment purchased, but the purchase price may also be different from the cash payment, and sometimes there is even the risk of litigation to recover the cost of materials and equipment.
Risk three: the contractor intentionally delinquent project price risk
Sometimes the construction unit itself has enough ability to pay, and even in the construction of the construction project has produced benefits (such as part of the commercial housing has been sold, rented), but also refused to pay the project. Contractor in the way has advanced a huge amount of money, want to stop work to recover the debt and fear that the relationship between the relationship between the deadlock to the project more difficult to recover the money, and thus fall into a difficult to ride a tiger, the awkward situation of the rat. In particular, if the construction project is completed after the builder is still unable to recover the project, will face the bank, material suppliers, equipment suppliers, construction workers and other creditors of the strong pressure. In order to solve the debt distress, the construction unit sometimes has to defy the construction unit to meet a number of unreasonable requirements.
Risk four: the risk of mismanagement brought about by the construction unit
Even if the business situation is good construction unit, generally is the first to consider the use of funds for the development of the project again, and the delinquent project payments to take as much as possible to avoid, delaying the attitude; if once the operation, sales do not go well, but also a variety of excuses will be refused to pay, delinquent or withholding of the project payment, thus bringing huge contractors. The risk.
Risk 5: the risk of disputes over labor fees
Generally speaking, the phenomenon of contractors defaulting on payment of labor fees is relatively common, and short-term delinquency can be understood and accepted by the labor force. However, if the contractor is unable to pay the labor cost for a long time due to various reasons, the risk of stopping the work, recovering the money and getting involved in litigation is also very realistic.
Risk six: market changes brought about by the risk
In the case of construction advances, the contractor on credit materials, equipment purchase costs, arrears in the practice of labor costs has been a common phenomenon. However, if the market situation in a certain period of time there are large changes, such as materials, equipment purchase costs or labor wages have a large increase, it will bring a great deal of additional burden for the contractor.
Risk VII: Risks arising from the transfer of construction projects by construction units