- 01 Nov
Construction Finance For A New Startup Company
Recently FundInvoice has added a lot of help and information for construction sector businesses that are looking to raise finance. We have just been able to help a new startup company, which is projecting turnover of £500,000 over the next year, within the construction sector.
The company operates as a sub-contractor, providing electrical and mechanical engineering services to the main contractor of various building projects . The jobs are often governed by JCT contracts between the main contractor and the subcontractor. These can be a problem for many traditional funders, however, specialist construction finance companies understand these types of contracts and are able to provide finance against them, before the whole project is completed.
Although many subcontractors within this sector raise applications for payment, rather than invoices (both can be funded), in this case the new startup company was going to be able to raise invoices, against which funding needed to be provided. This is not a problem, as soon as they raise a new invoice - even if its for a staged payment during a project - they can submit it to the funder and release cash against it. If a business builds up a sales ledger of outstanding invoices, then the amount of funding released will grow, as the sales ledger grows. It is ideal financing for fast growing companies as it does not have the finite limitations of lending amounts that you tend to see with bank loans, overdrafts and crowdfunding.
We understand this sector, you will see that we have conducted market research within it. So we have been able to introduce this client to specialist funders, and they are in the process of providing construction finance quotes. We are keen to help other companies within this sector (and we like a challenge!) so please get in touch and see what we can offer you.