Construction and the Answer to Late Payments
Late payment continues to be an issue for many UK businesses resulting in the Government announcing the launch of a “name and shame” website in the run up to the 2015 election. However, it appears to be having little effect especially in the Construction sector.
Latest figures show that construction firms are the worst hit sector in the UK having to wait an unacceptable 82 days (or 16 weeks) * for payment – an increase of 22% on last year! Compared to a UK average of 60 days, it would appear that the problem is more prevalent in the sector.
It can be very easy to dismiss late payment but it can have devastating effects. In 2015, businesses operating in the construction sector accounted for 17%** of all corporate insolvencies but when you consider the impact an insolvency has on the insolvent firms’ suppliers, many of which will be SME’s, it can have a substantial knock on effect.
With late payment such a challenge for the industry, ensuring a flexible supply of cash flow can be critical to the health of the company. With traditional sources of finance lacking in appetite when it comes to the construction sector, firms operating in the sector must widen their search for more relevant funding solutions.
Construction Finance from Pulse Cashflow Finance can help overcome the effects of late payment. Our experience of working with clients in the industry, supported by quantity surveyors, means that we really do understand your business and the challenges of the contractual nature of the industry.
Construction Finance from Pulse Cashflow Finance can deliver:
- Cash advances up to £1.5m
- Advances against application for payment to main or first tier contractors
- Free bad debt protection (BDP) on your funded customers
- Confidential credit control available
- Greater budgeting and forecasting control via a single fee
Who can benefit?
Construction Finance is ideally suited to profitable businesses with an annual turnover in excess of £2m and working within the construction sector in areas such as ground works, scaffolding, plumbing, electrical, roofing and fit outs.
* Analysis of Companies House data, latest figures available.
**Insolvency Statistics for year end March 31st 2016.