Construction Companies

Construction Companies

The construction industry which is responsible for putting up houses, corporate offices, factories, schools, apartments, bridges, and roads. In the UK a factoring facility can be used by a construction company to obtain cash when the available cash balance held by the firm is insufficient to meet new order and contracts.

In the UK the construction is among the industries that the UK Facrtoringhelpline.co.uk has helped the most.

By using a factoring facility the construction sub-contractor, or construction company, does not have to wait for payment before starting on the next stage of a project, or begin construction on a new project

  • A good factoring facility can mean that construction company, or the sub-contractor’s invoices can be paid right.
  • A factoring will essentially let a construction company start immediately on the next phase of construction for each project with a better cash flow.
  • Many construction businesses have cash flow that varies.
  • A construction business might have a relatively large cash flow in one period, and might have a relatively small cash flow in another period.
  • Because of this, construction firms find it necessary to use such methods as factoring.
  • One critical advantage of invoice factoring for construction firm is that it works very well for startups.
  • Most factoring companies are happy to work with construction businesses whose biggest asset good paying clients.
  • Some factoring firms do not like the construction business because some subcontractors within the industry use ‘Applications for Payment’ instead of invoices.
  • Many factoring companies only consider factoring the construction sector if there is additional security available to reduce their risk.

Unfortunately many construction firms get turned down for factoring because of the high level of disputes in the construction sector. In the UK most of well known factoring companies do not like businesses operating in the construction industry because there is a high level of retentions and variation orders. To get round this issue factoring forms will only offer finance a recourse factoring facility.

This means that the factoring company may ask for a personal guarantee should the debtor not pay in a given time period. Alternatively, construction firms may take out insurance against non-payment of dbts. Many factors and invoice discounters can also provide bad debt insurance.

Constructions sectors that may be suitable for factoring are:

  • Electrical contractors
  • Flooring contractors
  • Roofers firms
  • Scaffolding companies
  • Dry lining contractors
  • Structural repairs
  • Property maintenance
  • Drainage contractors
  • Architects
  • Inspectors
  • Engineers
  • Appraisers, flooring
  • Tiling contractors
  • Carpenters
  • Brick masons

The factoringhelpline.co.uk services are completely free of charge so if you are involved as a construction subcontractor in the building and construction industries and are interested in factoring and other cashflow solution then please call on 0800 597 4757

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