As a construction contractor you may work on Application for Payment funding, without waiting the 60 plus days it takes the main contractor to pay you. While traditional invoice finance providers may not be able to assist the good news is that there are specialist providers that can provide construction cash flow finance secured against your applications for payment and we can source these on your behalf.
Let’s take a look at options that are open to your business. However, it is important to understand whether you are looking to factor certified or uncertified applications for payment.
Whole Turnover Factoring
There are now several companies that will look at applications for payment funding. They do require the whole turnover to be notified. The prepayments on offer range from 40 – 70% of the net value of the application. They can be lower depending on what sector of the construction industry you are operating in. There are options for both certified and uncertified application however if your applications are certified it would be fair to say that more options exist for the finance.
Spot Factoring or Single Invoice Factoring
This is where you factor a single invoice or application. At present most people that provide this service do require the applications to be certified and prepayments range from 45 – 65%. This can be a good short term solution for construction contractors that require access to cash on an ad hoc basis. However, as a long term solution where you need to factor most of your invoices/applications most of the time it can prove very expensive as the interest rates are high. However, it does mean you can just factor the applications you want to and can dip in and out of the facility. There are also no contracts or minimum fees so as a short term solution spot factoring for applications for payment funding can be the most cost effective solution.
Biz Money Help to Application for Payment Funding
Biz Money have an excellent understanding of the construction industry and their funding needs, having worked with construction funders over a number of years we lead the way in delivering Application for Payment funding Solutions. This coupled with our in depth understanding of the invoice finance market means we are well placed to advise any construction contractor on how best to raise working capital against outstanding applications for payment.
Should you require more information about Application for Payment Funding please view our website, complete the quick form and someone will contact you to chat about it.