- 28 Nov
The Reasons Why Only 2% Use Construction Finance
As part of our recent #constructionfinance survey we asked 100 construction businesses if they needed to raise finance over the next 12 months - 65% said they did. However, we also asked if they used invoice finance or finance against applications for payment (hereafter called construction finance). Only 2% used construction finance so we went on to ask those that didn't use construction finance why not.
These are the reasons they gave for not using construction finance:
- 42% had never heard of it
- 22% said they were cash rich or didn't need finance
- 12% said it was too expensive
- 9% said they used an overdraft or bank loan instead
- 6% said they didn't think they would be suited to construction finance
- 4% said they had been turned down
- 3% said they had never considered it as an option
So the results suggest that the biggest issue for financing this sector is a lack of knowledge that construction finance is even available with 42% having never heard of it and a further 3% having never considered it as an option. There appears to be a great deal of scope to raise awareness of the availability of this type of finance within the construction sector specifically.