Construction Invoice Finance
Release cash locked in construction contracts
- Funding against applications for payment or staged invoices
- Sell single or multiple invoices
- Fast, stress-free funding in 24 hours
Quick Decision with No Obligation
Release cash locked in construction contracts
Quick Decision with No Obligation
Construction invoice finance (also referred to as 'construction factoring') is a funding solution for contractors and subcontractors that allows cash to be advanced against the value of raised invoices. This can include invoices for works completed under a contract, construction agreement or purchase order.
This type of funding helps businesses access cash tied up in unpaid invoices, providing working capital before customers or main contractors make payment. It can support day-to-day operations, including paying suppliers, employees, purchasing materials and covering other business expenses.
With construction invoice finance, you can receive up to 95% of the invoice value in as little as 24 hours. This provides a flexible way to improve cash flow and access funds when your business needs them.
Construction businesses often experience cash flow pressures due to lengthy payment terms, with customers and main contractors sometimes taking 30, 60 or even 90 days to settle invoices. This can make it challenging to manage ongoing projects, pay suppliers and maintain a steady flow of work.
With construction contracts often involving milestone payments, staged invoices or applications for payment, businesses may need to continue purchasing materials and paying wages before receiving payment for completed work.
Having an invoice finance facility in place can provide access to the working capital needed to keep projects moving, reduce the impact of delayed payments and allow you to focus on completing contracts without constantly chasing customer payments.
Did you know? The UK construction industry contributes around £230 billion to the economy and supports more than 2.6 million jobs, according to the Construction Industry Training Board (CITB) and Oxford Economics.
Invoice finance for construction companies can help UK contractors, subcontractors and other construction businesses access funds tied up in unpaid invoices, staged invoices and applications for payment.
Construction invoice finance may be suitable for:
Whether you’re a small subcontractor or an established construction business managing multiple contracts, construction invoice finance can provide flexible funding to support your ongoing projects and business growth.
Construction invoice finance can be used against various types of construction-related invoices, including:
Invoice factoring, also known as construction factoring, allows a finance provider to manage your customer payments and credit control on your behalf. This can save time and improve cash flow management, although customers are usually aware that factoring is being used.
Invoice discounting keeps the credit control responsibility with your business as normal. This is a confidential form of invoice finance, meaning your customers will not know that you are using a finance facility.
Selective invoice finance allows you to choose which invoices you want to fund, rather than financing your entire sales ledger. This can provide flexibility for construction businesses that only need funding for specific projects, customers or payment milestones.
Lengthy payment terms imposed by main contractors can cause cash flow issues for subcontractors such as Joiners, Plumbers, Electricians and Ground Workers. Construction finance solves this issue by releasing the cash tied up in your applications for payment, staged invoices or sales invoices.
Raise and submit your construction invoices such as staged invoices or certified / uncertified applications for payment to the finance provider.
Get up to 95% of the invoice value upfront in just 24 hours.
Depending on the service you choose, the collections process is done by the finance provider or confidentially kept in-house. Once the customer makes the payment, the remaining balance will be released to you.
Introduced on 1st March 2021, the VAT domestic reverse charge changes how Construction Industry Scheme (CIS) registered businesses such as contractors and sub-contractors handle and pay VAT.
The new VAT domestic reverse charge is designed to combat 'missing trader' fraud by shifting VAT payment responsibility from the supplier to the customer unless they are the end client in the supply chain. This means that businesses will no longer be able to rely on VAT money for cash flow.
The VAT domestic reverse charge can create additional pressure on construction businesses because suppliers no longer receive VAT payments from customers in the usual way. This can reduce available working capital, making invoice finance a useful option for managing cash flow.
We can help release up to 95% of the invoice value within 24 hours of approval, with the remaining balance paid once your customer settles the invoice.
Yes. Construction invoice finance is specifically designed to work with staged invoices, certified and uncertified applications for payment, and milestone billing common in construction contracts.
Since the reverse charge shifts VAT payment responsibility to the customer, businesses can no longer rely on VAT collected on invoices for working capital. This makes invoice finance a useful way to plug that gap.
No. It's suitable for businesses of all sizes. From sole-trader subcontractors and specialist trades to large civil engineering firms, invoice finance can help, provided you invoice other businesses for completed work.
The cost of construction invoice finance depends on factors such as your turnover, invoice value, customer creditworthiness and the type of facility you choose. Fees typically include a service fee for managing the facility and a discount fee (similar to interest) on the funds you access. Costs vary by provider, so a tailored quote is the best way to understand the price for your business.
SME Invoice Finance is an online platform dedicated to helping UK construction businesses find the right funding solutions quickly and easily. We’re committed to supporting your growth with tailored construction invoice finance solutions that match your needs.
Whether you’re a contractor waiting for payment on completed work or a subcontractor managing multiple projects, we can help you access the working capital needed to keep projects moving. Apply today to receive your free, no-obligation quotes.
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Since 2014, we've helped many businesses, large and small, get access to the working capital they need through invoice financing.
Some of the funders we work with
