Construction
Get paid sooner so you can fund the next job lined up
Invoice Finance For Construction Companies
In the world of construction, cash isn’t king – cash flow is. It quite often takes longer to get paid in the construction industry than any other. Having an invoice finance facility can help release pressure as you no longer must wait to be paid before you move onto the next job.
Not all lenders like this industry. This is because the paper trail behind the invoices is sometimes contractual, meaning a client can often dispute an invoice. There are also more insolvencies in this sector than any other. When choosing an invoice finance facility for your construction business, you must work with a lender that understands your funding requirements and the obstacles you face daily.
Benefits of Invoice Finance in the Construction Industry
Late Payments
With clients in the UK construction sector often taking 60–90 days to pay, invoice finance lets you access that money straight away instead of waiting.
Handle Retentions & CIS Deductions
Even when part of your invoice is held back for retentions or tax deductions, invoice finance helps you unlock working capital from the remaining balance.
Keep Subcontractors Happy
Paying tradespeople and subcontractors on time (a big challenge under CIS rules) helps you maintain strong teams and avoid project delays.
Stay Compliant & Competitive
Smooth cash flow means you can cover HMRC payments, insurance, and accreditations on time, so you never miss out on tenders.
Take On Larger Contracts With Confidence
With reliable funding behind you, you can bid for bigger projects knowing cash won’t hold you back.
Send your invoices
Receive up to 70% of the invoice
Your customer pays their invoice
You receive the remaining 30%
How do I get an Invoice Finance facility?
This is where Contact Business Finance comes in! We have a wealth of knowledge in the world of Invoice Finance and can put you in touch with the most suitable lender. Within our free-of-charge service, we will compare the market for you to find a lender that is the best fit for you and your business.
And it’s not just Invoice Finance we can help with – we can look at property finance, bridging loans, commercial mortgages, business loans, asset finance, trade finance and more.
Frequently Asked Questions
How does Invoice Finance work with staged payments and applications for payment?
Invoice finance can work for construction businesses even when payments are made through staged billing or applications for payment. No matter what stage you receive the payment certificate. Specialist construction finance providers can advance funds at each certified stage or milestone. At each stage of a job, cash can be released. These facilities are tailored to handle the industry’s complexities, for example, retentions, variations, and longer payment terms — making them more suitable than standard invoice finance arrangements.
Can Invoice Finance be used if part of the invoice is tied up in retentions or affected by CIS (Construction Industry Scheme) deductions?
Yes – Invoice finance can still be used even if part of the invoice is subject to retentions or CIS deductions. However, most funders will only advance cash against the net invoice value, excluding the retention or CIS portion.
What happens if the client doesn’t pay on time – is my business still liable for the advance I’ve received?
Yes. In most cases, you’re still liable for the advance if your client doesn’t pay on time. Most invoice finance lenders off 90 days end of month as a recourse period. This is the length of time that you receive funding on invoices. However, some providers offer non-recourse facilities, where the funder absorbs the loss if the client becomes insolvent (though not for disputes or late payments). Specialist construction finance lenders can help structure terms to manage these risks.
Is Invoice Finance flexible, or do I have to finance all my invoices/contracts?
Invoice finance can be flexible – you don’t have to fund every invoice. There are providers that let you choose which approved applications or invoices to fund, giving you control over when and how you use the facility. Some lenders offer selective or spot construction finance, so you can release cash only when needed, rather than committing all your contracts or clients. This type of facility often costs more.
Will my clients know I’m using Invoice Finance and could that affect relationships?
Your clients knowing about your selected invoice finance provider is dependent on the type of facility you have. If you have a standard invoice factoring facility, the lender’s bank details are disclosed at the bottom of your invoices and they will also assist with credit control. However, if you decide to get a confidential facility – the bank details at the bottom of the invoices will be in a trust account named after your business and credit control stays with you.
Can it be used if I work with both businesses and private clients?
Invoice finance can only be used if you trading with other businesses. Lenders will not fund invoices that you raise to individuals. These invoices would have to be excluded.
How quickly can I get set up and start drawing funds?
Invoice finance can often be set up within days. However it is normal for most lenders to have everything in place within 1–2 weeks depending on your businesses circumstances. Once your contracts, paper trails, applications for payment are reviewed. After approval, you can sometimes start drawing funds within 24 hours of submitting an eligible invoice or application.
Will it work for short-term contracts or only long-term frameworks?
Invoice finance can work for both short-term contracts and long-term frameworks. If there’s a valid invoice, application or approved payment due, specialist construction finance providers can advance funds, regardless of contract length.
Do I need to have a minimum turnover or number of invoices before I qualify?
Most invoice finance providers work of a minimum turnover of £100,000 per year however requirements may vary. There’s usually no strict minimum number of invoices, though having regular, approved applications or invoices helps qualify and access funding quickly.
Can I insure my invoices?
Yes, giving you peace of mind if any of your clients go through any form of insolvency. There are more insolvencies in the construction industry than any other, therefore it is often advise that you take bad debt protection with the lender or have your own trade credit insurance policy.