Construction cash flow challenges are a financial reality for many contractors. Big projects can take months, or evens years, to complete, yet your ongoing operating costs need to be covered at regular intervals. This is difficult when your income doesn’t balance your cash output, placing the project, and your company, at risk.
Banks are less willing to offer new overdraft facilities, or extend existing ones, and traditional invoice finance solutions are often as rigid in their approval processes. The credit ratings of the debtors you are supplying to is also a risk factor any lender has to bear in mind.
Debt is a highly contractual issue and Joint Contracts Tribunal (JCT) contracts don’t offer much room for negotiation. This is further complicated by the application for payment process which can take 60 to 90 days to approve. While waiting for the customer or general contractor to settle, you still need construction finance
to pay wages and suppliers for work that has been completed or already measured.
Another cash flow challenge contractors face is quantity surveyor approval (QS) – without their certification, you, the contractor, don’t get paid. Many smaller sub-contractors don’t have the resources to continually follow up with the QS, this can delay payment and increase their debt substantially.
Construction cash flow challenges are triggered by economic uncertainty and currency fluctuations. As the price of raw materials increases, so too does your expenditure. In these circumstances, customers and general contractors, debtors themselves, are even more inflexible and won’t negotiate invoice payment on anyone’s terms but their own.
If you’re looking for a way to overcome these challenges, we have a solution.
Keep your construction cash flow positive
Nucleus has developed a confidential invoice finance facility that provides contractor loans
within ten working days of successful application.
Our construction finance team includes surveyors. This in-house expertise allows us to quickly assess and fund uncertified applications. Our process is secure and exact, removing all discounts, retentions and VAT to ensure that the correct loan amount is provided.
Our QS support means that we can offer fast, flexible contractor loans to help you overcome your construction cash flow challenges, ensuring that your business:
- Is protected while waiting for invoices to be settled
- Can pay ongoing costs
- Has working capital to bridge cash flow gaps
Why Nucleus Commercial Finance?
We believe that our innovative alternative finance products can help the UK’s SMEs with the funding they need when the banks say no. Our commitment is to support your long-term growth plans with the best financial solutions possible and our contractor loan is one such example.
Our team of financial specialists can answer all your alternative finance questions. To find out more, contact us