Use of external sources of financing in the construction industry

Abstract

This article analyzes the use of external sources of financing in the construction industry. The article responds to the claim that managers of companies in the construction industry prefer bank loans and the fact that a large volume of bank loans failed to their default. The task of this article is to map the current business situation, and the use of external financing types. The survey method chosen was empirical inquiry. It was necessary to determine the size of a representative sample as the entire population was too large. The questionnaire survey revealed that the most frequently used sources of financing include unpaid invoices to suppliers and advances received from customers. Bank loans as initially preferred tool for external financing placed on the third place. Given that the two main sources of financing are short-term nature of resources there are concerns that companies financed with short-term funds also fixed assets and therefore so have solvency problems.