The construction cash gap
Contractors often pay for labour and materials weeks before they are paid themselves, and retentions can hold back part of the contract value for months after completion. Even profitable firms can run short of cash as they win more work.
Why standard invoice finance can struggle
Applications for payment are not the same as invoices for completed work, and many funders will not lend against them. Specialist construction finance providers understand valuations, certification and retentions.
Options to consider
- Construction-specific invoice finance against certified applications
- Asset finance for plant, vehicles and tools
- Short-term unsecured loans to fund mobilisation
- Supply chain or trade finance for materials
Strengthen your application
Lenders like to see a clear order book, contracts with creditworthy main contractors or clients, and a track record of completing jobs without disputes. Keep your valuation paperwork tidy.
Plan around CIS and VAT
The Construction Industry Scheme and domestic reverse charge VAT both affect cash timing. Build them into your forecast so that finance covers the real gap, not just the headline figures.
Related service: Sector-specific commercial finance
This guide is general information and not financial advice. B2B Loans UK acts as an introducer only. All finance is subject to status, affordability and lender criteria.