Construction business finance
General trades, subcontractors, main contractors. CIS retentions and stage-payment cycles drive working-capital gaps. Plant and machinery finance is a major sub-product. A common decline reason in this sector is sole-trade structure (mainstream lenders prefer Ltd). Lenders to consider for construction include Funding Circle, Allica Bank, iwoca.
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Which finance fits a construction business
General trades, subcontractors and main contractors use a blend of products driven by stage payments and retentions. Invoice finance against quality main-contractor invoices funds the wait for stage payments, though CIS retentions held back to the end of a contract need careful structuring. Plant and machinery finance and scaffolding finance spread the cost of kit over its working life, while a working-capital term loan bridges between valuations on longer projects. Specialist bonds and guarantees support contractors who need to provide performance security.
The cashflow problem in construction
Construction cashflow is lumpy and stage-payment dependent. Sub-trades typically face main-contractor payment cycles of 60 to 90 days, and CIS retentions, often a percentage of each invoice, are held back until practical completion and beyond. Wages, plant hire and materials all go out continuously while income arrives in irregular blocks tied to valuations. That timing mismatch, combined with end-of-contract retention drag, is the defining financing challenge in the trade.
What lenders weigh, and what to do next
Lenders weigh your trading structure (mainstream lenders prefer a Ltd company over sole-trade), how reliant you're on a single main contractor, and any recent CCJs from supplier disputes. iwoca, Funding Circle and Allica Bank all engage with construction on the right profile, with specialist asset lenders covering harder plant. If a supplier dispute has produced a CCJ, the CCJ guide and the subcontractor late-payment guide set out the alternatives. If you run a limited company or LLP, you can send an enquiry through FundBiz, and a business finance broker will contact you about your options.
Cash-flow shape
Lumpy, stage-payment dependent. CIS retentions trapped at end of contract. Sub-trades face main-contractor payment cycles often 60-90 days.
Products that fit
- Invoice finance against quality main-contractor invoices
- Asset finance for plant
- Working-capital term loans bridging stage payments
- Bonds and guarantees (specialist)
Lenders to consider
- Funding Circle
- Allica Bank
- iwoca
- Specialist construction asset finance lenders
Typical decline reasons in this sector
- Sole-trade structure (mainstream lenders prefer Ltd)
- Tied to one main-contractor (concentration risk)
- Recent CCJ from supplier dispute
FAQ
What kind of business finance fits construction?
Usually invoice finance against quality main-contractor invoices or asset finance for plant. Every product that fits is under Products that fit above.
Why do construction businesses get declined?
The most common reason is sole-trade structure (mainstream lenders prefer Ltd). The others are under Typical decline reasons in this sector above.
Which UK lenders fund construction?
The first two on our list: Funding Circle; Allica Bank. The full list is under Lenders to consider above.
Send an enquiry
Tell us what you need in 2 minutes. FundBiz is not a lender and does not run a credit check. We pass your enquiry to a business finance broker, who will contact you about your options. For limited companies, LLPs and partnerships with four or more partners.
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