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• 11 Jan

  Construction Finance Against Multi Million Pound JCT Contracts

  

  Construction finance was able to be provided to a client company dealing with multi-million-pound JCT contracts.

  Construction Finance Against JCT Contracts

  The use of JCT contracts is common within the building sector. JCT stands for Joint Contracts Tribunal and refers to a set of standardised contracts that be used in the building sector.

  Our client was involved with the sector and didn't think that invoice financing would be available when they operated under JCT contracts Indeed, this would be an issue for many invoice finance companies. However, there are some specialist funders who are keen to support companies within the construction sector.

  Larger JCT Contracts

  In this case study, our client was a multi-million-pound turnover company and they were finding that the size of the contracts they dealt with had been increasing. They also wanted to get access to the funds tied up in the receivables owed by their debtors - before those accounts receivable were due to be paid by the debtors. This is a common issue that construction finance solves.

  Independent Construction Financing

  We were able to successfully introduce them to an independent invoice finance company that specialises in helping building sector companies. They were able to provide a construction financing facility that will generate the financing to support our client's cash flow requirements.

  How The Financing Works

  This type of financing facility works by releasing a large proportion of the money that is tied up in unpaid accounts receivable. These may be invoices raised to debtors on credit terms or applications for payment (which are common in 75% of the sector's businesses according to our research). Many receivables financing companies decline to get involved with this sector, due to the complexity of the contracts and their perception of the attached risks.

  However, there are funders that embrace the opportunity to finance building companies and so invest in skilled specialists who are able to access those underlying contracts.

  By Glenn Blackman