Construction Financing
Explore business funding for materials, equipment and working capital, with repayments planned around project costs and collected payments.
Construction Business Finance Made Simple
Construction finance needs to reflect the gap between paying for work and collecting the related income. Materials, subcontractors and wages may need paying before an application for payment is assessed or an invoice is settled.
A profitable contract can still put pressure on cash if payments arrive late or amounts are retained. Build the funding request from the project schedule, payment terms and current commitments. Contract value alone does not show the amount available to service borrowing.
PDQ Funding helps UK businesses explore business loans and merchant cash advances. The available route depends on the business, its payment channels and the provider’s assessment.
For additional premises or capacity, use our guide to business expansion finance. For a defined gap in operating receipts, read about working capital loans.
What could the funding cover?
- Materials and mobilisation costs for a defined project.
- Tools, plant and equipment, including delivery and installation where relevant.
- Systems supporting estimating, job costing and administration.
- A forecast gap before agreed customer payments are collected.
Separate approved invoices from work still subject to valuation, certification or dispute. Include retentions and any expected deductions in the cash forecast. Do not assume a funder will advance against unapproved work or that every construction invoice is eligible for invoice finance.
Compare the funding structure
Construction business loans
A business loan may support a defined project or working-capital requirement. Compare asset finance for suitable plant and equipment. Invoice finance can be explored separately where the invoices, contracts and provider criteria permit; it is not interchangeable with a term loan.
A loan provides an agreed sum repaid over a set term, with interest and fees. Ask for the payment schedule and full cost before deciding whether it fits the business.
Funding linked to qualifying card sales
Many construction businesses are paid by bank transfer rather than card. A conventional merchant cash advance needs qualifying card receipts, so it may be less relevant to a contractor paid through staged invoices. Describe the real payment route from the outset.
A merchant cash advance provides upfront funds, collected through an agreed percentage of qualifying card receipts. Collections can vary with those receipts. Check any minimum payment, reconciliation or other contractual requirements.
Stress-test late payments and project overruns
Forecast after materials, subcontractors, payroll, premises and existing borrowing. Allow for delays, remedial work and cost increases. A repayment plan should not assume every project reaches completion on time or that all retentions are released immediately.
Compare net funds received, fees and total repayable across quotations. For an advance, the collection percentage is different from the funding fee: a smaller percentage taken from sales does not necessarily mean cheaper funding.
Review security, personal guarantees and early settlement terms. Unsecured funding can still involve a personal guarantee, creating personal liability if the business cannot pay. Consider independent advice before accepting an agreement.
Eligibility and information to prepare
Provide accounts, bank statements, current borrowing, aged debtors and a project cash forecast. Add contract payment terms, the stage of each invoice and supplier quotations. Explain customer concentration and any disputed balances.
Providers may assess trading history, financial records, credit information, existing commitments and affordability. Requirements vary; an enquiry does not guarantee an offer, amount or completion date. Tell us about other applications or finance already in place so the overall commitment can be considered.
Construction finance questions
Is construction finance the same as property development finance?
No. Funding for a trading contractor’s working capital differs from a facility structured around a property development. Explain the purpose and project clearly.
Can unpaid invoices support funding?
Some may be eligible for invoice finance, subject to contract terms, invoice status and provider criteria. Unapproved or disputed work should be identified separately.
Can I fund plant and tools?
A defined purchase may be considered. Compare the full cost and an appropriate asset finance quotation, including servicing and ownership.
Discuss your funding requirements
Tell us what you need to fund, the amount required and how the business receives income. Complete the online enquiry form or call 01246 233108 to discuss the next steps.
PDQ Funding is a broker, not a lender. We do not charge for using our brokerage service and receive lender commission following a successful introduction. There is no obligation to accept an offer.
For related information, see business finance by industry.
Your funding enquiry
Share your business details and funding needs.