- 07 Dec
Receivables Finance Help For Construction Companies Rejected For Invoice Finance
Construction sector companies often don't quality, or are rejected for invoice finance by the majority of the invoice finance companies. However cash flow can be an issue as debtor payment delays are common within the sector, and protection against bad debts can be helpful in the wake of large company failures, such as Carillion.
Help is available though in the form of specialist receivables finance for construction companies, which is available from a handful of specialist funders.
Why Invoice Finance Companies Often Reject Construction Companies
The reason why traditional invoice finance companies don't like building related debts is due to a number of factors. Firstly, in approximately three quarters of cases companies in the sector raise applications for payment, rather than a sales invoice to their customer. Many funders won't accept these. Specialist funders that handle the sector will accept applications for payment, and provide a prepayment against them, in some cases even if they are uncertified.
The contractual nature of the transactions within the sector also puts funders off. The presence of contracts can cause them to worry about there being an obligation to complete further work, before having to pay for the current stage of activity. Specialist funders look beyond this and use Quantity Surveyors to evaluate your contracts and set the prepayments at a level that accounts for these types of issues.
Lastly traditional invoice funders often choose to avoid the sector as payments terms can be extended, ironically this is why companies in the sector are often in most need of this kind of cash flow finance.
Receivables Finance For Construction Companies
The specialists that offer receivables finance for construction companies are few in number (the number is growing though), but they have expertise in dealing with the sector, so will take a sympathetic approach to funding your business. This can help main contractors and sub-contractors involved directly or even indirectly with the building sector.
Been Rejected Already?
If you have been rejected by one or more invoice discounting or factoring companies you should take a look at the alternatives that we can offer, as there are likely to be options to get the working capital funding you need. Bear in mind that many mainstream providers will not be aware of exactly what these specialists are able to do, so don't be put off from getting in touch just because someone has told you that no one will be able to help.
Get Help Now
We have been able to successfully help many companies within the sector. Please call Sean on 03330 113622 to discuss getting receivables financing for your company.