Construction business finance

Which finance fits a construction business

General trades, subcontractors and main contractors use a blend of products driven by stage payments and retentions. Invoice finance against quality main-contractor invoices funds the wait for stage payments, though CIS retentions held back to the end of a contract need careful structuring. Plant and machinery finance and scaffolding finance spread the cost of kit over its working life, while a working-capital term loan bridges between valuations on longer projects. Specialist bonds and guarantees support contractors who need to provide performance security.

The cashflow problem in construction

Construction cashflow is lumpy and stage-payment dependent. Sub-trades typically face main-contractor payment cycles of 60 to 90 days, and CIS retentions, often a percentage of each invoice, are held back until practical completion and beyond. Wages, plant hire and materials all go out continuously while income arrives in irregular blocks tied to valuations. That timing mismatch, combined with end-of-contract retention drag, is the defining financing challenge in the trade.

What lenders weigh, and what to do next

Lenders weigh your trading structure (mainstream lenders prefer a Ltd company over sole-trade), how reliant you are on a single main contractor, and any recent CCJs from supplier disputes. iwoca, Funding Circle and Allica Bank all engage with construction on the right profile, with specialist asset lenders covering harder plant. If a supplier dispute has produced a CCJ, the CCJ routing and the subcontractor late-payment routing set out the alternatives. Companies House status and FCA-authorised lender selection are part of every match. Run the eligibility checker to be routed on your contract and asset profile.