Construction Business Finance UK 2025

Construction-Specific Funding

Construction businesses face unique challenges:

• Long payment terms: 30-90 days common, some public sector 120 days
• Retention payments: 5-10% held for 12 months post-completion
• Upfront material costs: Buy materials before getting paid
• Plant & equipment costs: £50k-£500k for machinery

Best Funding Types for Construction

1. Invoice Finance - Most Popular

Perfect for construction payment delays. Advance 80-90% of invoice value immediately.

• Amount: Up to £10m facility
• Cost: 1.5-3.5% discount fee
• Approval: 3-5 days
• Solve: 60-90 day payment terms

2. Plant & Equipment Finance

Finance diggers, dumpers, scaffolding, tools:

• Amount: £5k-£2m per asset
• APR: 5-9% typically
• Term: 2-7 years
• Deposit: 10-30%

3. Project Finance

For specific large projects (£100k+ value):

• Fund materials and labour for single project
• Repay from project payment
• Specialist construction lenders

Specialist Construction Lenders

• MarketFinance: Invoice finance for construction, 1-2 day decisions
• Bibby Financial: Construction invoice factoring specialist
• Siemens Financial: Plant & equipment finance
• Lombard: Construction equipment, vehicles

Managing Construction Cash Flow

Common cash flow solutions:

• Invoice finance for payment delays (80-90% advance)
• Overdraft for material purchases (flexible)
• Equipment finance for plant (preserve cash)
• Retention finance (access 5-10% retention money early)