At a Glance

• A construction dealer network looks like diversification across many dealers and contractors but behaves like a single position on the regional building cycle.
• Dealer-by-dealer credit review misses the correlation: when the cycle turns, the whole network and its contractor customers move together.
• Contractor cash flow is seasonal and project-dependent; structures and underwriting built for smooth monthly payments misread the business.
• Construction iron has deep, liquid used markets — a real collateral strength — but values soften in exactly the downturn that drives defaults.

What a Construction Dealer Network Actually Is