Construction Finance

Construction finance is a specialist form of funding designed for businesses in the construction industry. Construction finance can come in several forms from secured and unsecured loans to equipment leasing. It is often used to purchase expensive equipment that is required for construction businesses to function.

Other uses include:

• Equipment and heavy machinery costs

• Business expansion and growth opportunities

•  Lengthy payment terms, advancing cash against late payments

•  Increased cash flow and working capital

Construction finance: what are my options?

Entrepreneurs in the construction sector have various funding options available to them. Not all of the commonly recommended funding options will suit every construction business owner. It is important to do your research and think carefully about which construction finance product will align with your business best.  Finance is available to businesses of all sizes, including small businesses.

In this section we’ll walk you through a couple of your options:

Construction business loans

Both secured and unsecured business loans suit construction companies in need of funding. This type of finance can be used to get new ventures off the ground and grow your construction business so that it can reach new heights.

Our unsecured construction business loans offer funding up to £500,000, with flexible repayment terms over 1 – 5 years. The money you loan gets repaid in monthly payments at a pre-agreed interest rate.

 

Invoice finance

Invoice finance for construction enables you to unlock instant cash from your business’ unpaid invoices.

In many cases, you can receive up to 95% of each invoice’s value. This specialist finance option benefits SMEs in the construction sector where customers are notorious for paying invoices slowly. By using an outsourced sales ledger to account for each customer’s financial records, more time is freed up for you to focus on your business. If you choose to go down this route, be sure to research bad debt protection which is designed to complement invoice finance facilities.

 

Construction equipment finance agreements and leasing

If you are considering construction equipment finance agreements or equipment ‘leasing’ then do so cautiously. With this type of asset finance, you hire your equipment for a certain period of time, until the agreed leasing amount has been paid off in full. Thereafter, the equipment belongs to your business.

Unfortunately with equipment leasing, if you are unable to upkeep repayments you will lose all the money you have already paid towards the main debt, as well as the equipment. The risk associated with this finance option is quite high for entrepreneurs of businesses in their early stages.