Invoice Factoring For Construction Companies, cash flow is critical to construction companies and invoice construction finance can help fund the gap.
This will help business cashflow between raising bills or applications for payment and getting paid. Invoice Factoring helps take the issues of credit control and the worry of cash coming in to pay wages, supplies and merchants away by releasing cash from tied up outstanding invoice payments.
Contractual debt, uncertified stage payments or applications for payment? Is the problem becoming greater and holding you back the faster your business grows? Invoice Factoring for Construction businesses could be the perfect fit for that payment gap.
What is Construction Factoring
Invoice Factoring for a construction business is a commercial finance product which is used to release funds to a business, with outstanding invoices used as security. It is an area of business borrowing that has been under-utilised in recent years.
The number of invoice finance lenders that support the construction industry in the UK has been declining as lenders move out of the space due to fraud. In 2021 the number of lenders total three, Bibby, Ultimate and 4Syte Construction Finance.
This highly flexible form of borrowing can be used to free up funds from your debtor book, relieving the pressure placed on your cash flow. Many businesses are turning to this option to take back control of their finances, allowing them the breathing space needed to move forward.
How does Construction Invoice Factoring work
Construction invoice factoring works by advancing monies against any unpaid and outstanding invoices your business may have.
- Submit your invoice and issue it to your client with a copy to the invoice factoring company
- You will then receive 95% of the invoice value upfront, minus any agreed fees in just 24 hours.
- Once your customer has paid the final balance released
Construction factoring can be used with uncertified applications for payment to unlocking valuable cash flow to your business. This type of finance is the perfect fit for builders and construction companies looking to grow.
Factoring an application for payment
Stage payments, uncertified applications for payments, and the contractual nature of debts make it difficult for construction companies to secure construction finance from traditional lenders. Structured staged payments or ‘Applications for Payments’ will be considered for factoring.
This supports your business by not having to wait for the payment to arrive in 60, 90 or 120 days. Funds are then advanced within 24 hours of requesting the draw down. This will help towards materials and operating costs to allow the completion of the contracts on time.
Benefits of Construction Factoring?
- Cash is released against certified and uncertified applications for payment, staged invoices or sales invoices
- Up-to 95% of the invoice amount can be realised in 24 hours
- Specially designed for the construction sector, main contractors and subcontractors
- Fully managed credit control service
- Cash flow improvement instantly for your business
- Non-payments Bad Debt Protection can be added
Why work with us?
We understand the construction industry, having be in the sector for over 15 years. To simply get a ground breaking factoring quotation for your construction business complete the online enquiry form.
F.A.Q’s
What is Construction Factoring?
Construction Factoring is a specialist funding and support solution designed for contractors and subcontractors who provide construction services under a contract, framework agreement or Purchase Order. It provides funding by advancing cash against the value of invoices raised on the completion, or part-completion for staged contracts, of work carried out.
How can invoice factoring benefit my construction business?
Once your factoring facility is agreed, cash tied up in unpaid billing is usually released within 24 hours so you can stay on top of your operating costs and the costs of buying raw materials for your projects. Construction factoring enables you to access cash tied up in contractual debt, uncertified stage payments or applications for payment.
Can Construction Factoring help my business?
You are a contractor or sub-contractor working in the UK construction industry. You raise an Application for Payment for part or completed works. Work under a contract, framework agreement or Purchase Order. You want to maintain a healthy cash flow to build working capital.
Seasoned professional with a strong passion for the world of business finance. With over twenty years of dedicated experience in the field, my journey into the world of business finance began with a relentless curiosity for understanding the intricate workings of financial systems.