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PUBLISHED ON: 19/04/2023

Commercial finance for construction businesses

The construction industry is a significant contributor to the UK economy and fundamental to societal well-being. It drives employment and growth in good times but if the economy slumps its volatile nature also makes it susceptible to decline.

It is imperative, therefore, that construction businesses have fast access to funding when necessary – to finance solutions that address the unique pressures they experience and provide support to positively impact the economy in this country.

UK Business Finance are construction finance specialists and can help you find the most appropriate form of funding for your needs, at the lowest cost. We know the criteria set by all UK lenders and offer our services free of charge to you.

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With full market access and absolutely no ties to any lender, we can objectively match you with the most effective and cost-efficient source of business finance. Contact our team today!

Challenges facing the construction industry

The resilience of the construction industry has been sorely tested over the past few years. Covid lockdowns and materials shortages are just two issues that have either completely halted or severely delayed construction projects in the UK and worldwide.

Soaring costs of materials and energy
The steep rise in inflation has led to significant increases in the cost of construction materials, which makes planning and costing for building projects unpredictable. Increased energy costs due to the war in Ukraine further compromises working capital availability and creates additional financial pressure for construction businesses.

Shortage of skilled and unskilled workers
Labour shortages delay completion of vital housing and infrastructure projects. If the skills gap is not closed and new workers attracted into the industry it could negatively impact the economy.

Investment in digital technology
Digital technology can increase efficiency in the construction sector but investment and training may seem out of reach financially for some businesses.

Supply chain issues
Complex supply chains in construction mean that a single problem can quickly be magnified and have a knock-on effect throughout the entire supply chain.

Late payment
Late payment is an inherent problem for construction sector businesses, and a difficult one to overcome without specific types of funding. Consistent late payments jeopardise financial stability for smaller suppliers.

Commercial finance solutions for construction businesses

Equipment leases
Leasing expensive pieces of construction equipment keeps cash flow stable, and with flexible options at the end of a lease a business might choose to upgrade the equipment, extend the lease, or simply hand the equipment back if it is no longer needed.

Invoice finance
Invoice finance is based on the value of a business’ sales ledger and means that working capital is quickly released once an invoice has been issued. It is flexible and quick to access, and prevents the long wait for payment that can be widely experienced by smaller construction firms.

Supply chain finance
Supply chain finance is arranged by larger construction companies but also benefits their smaller suppliers. The borrower can extend their payment term whilst suppliers receive immediate payment that protects the integrity of the whole supply chain.

Asset finance
Various forms of asset finance mean construction businesses can purchase expensive hard assets and pay for them at an affordable monthly rate. No capital is used up and the business has immediate use of the asset being funded.

Applying for construction finance
UK Business Finance are commercial finance brokers and can help you find the best finance deal for your construction business. We search the whole of the market to find the most suitable deals, ensuring they meet the specific needs of your business.

Our no-obligation services are free, and we have contacts with lenders throughout the UK. Please get in touch to find out more.

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