#Construction invoice factoring free#

After all, your customers are the ones who will be paying them. You have no credit (or you have credit issues).įactoring companies aren’t interested in your credit history or how quickly you pay bills. You can receive most of your money in just a few days from the factoring company, and you’ll get the balance when your customer pays (less the factoring company’s fees). If you find that you are always having to wait to pay your bills, factoring could be a good choice for you. It can be difficult to wait that long, especially when you need to buy materials, meet payroll, and pay your suppliers. In construction, you may have to wait 45-60 days or more for payment (the average time in construction is 83 days!). Line of Credit: What’s the Difference? Why use invoice factoring? You need money quicker than your customers typically pay you.

Fees for this service, called the factoring rate, are approximately 1-3% of the amount of invoices sold. Your customer then pays the factoring company, who sends you the remaining balance, less the factoring company’s fees. You sign an agreement to sell your invoices to the factoring company, and they give you 75-90% of the money upfront as an advance.

The Cons: Drawbacks of construction factoringįactoring turns construction invoices into cashĬonstruction invoice factoring involves a company purchasing your unpaid invoices in exchange for immediate cash.

The Pros: Benefits of construction factoring.

Video: The pros and cons of construction factoring.

You don’t want to use other financing options, such as bank loans or credit cards.

You don’t have collateral to get a loan.

You have no credit (or you have credit issues).

You need money quicker than your customers typically pay you.

Factoring turns construction invoices into cash.

To simply get a ground breaking factoring quotation for your construction business complete the online enquiry form. We understand the construction industry, having be in the sector for over 15 years.

Non-payments Bad Debt Protection can be added.

Cash flow improvement instantly for your business.

Specially designed for the construction sector, main contractors and subcontractors.

Up-to 95% of the invoice amount can be realised in 24 hours.

Cash is released against certified and uncertified applications for payment, staged invoices or sales invoices.

This will help towards materials and operating costs to allow the completion of the contracts on time. Funds are then advanced within 24 hours of requesting the draw down. This supports your business by not having to wait for the payment to arrive in 60, 90 or 120 days. Stage payments, uncertified applications for payments, and the contractual nature of debts make it difficult for construction companies to secure construction finance from traditional lenders. Structured staged payments or ‘Applications for Payments’ will be considered for factoring. This type of finance is the perfect fit for builders and construction companies looking to grow.

Once your customer has paid the final balance releasedĬonstruction factoring can be used with uncertified applications for payment to unlocking valuable cash flow to your business.You will then receive 95% of the invoice value upfront, minus any agreed fees in just 24 hours.Submit your invoice and issue it to your client with a copy to the invoice factoring company.How does Construction Invoice Factoring workĬonstruction invoice factoring works by advancing monies against any unpaid and outstanding invoices your business may have. Many businesses are turning to this option to take back control of their finances, allowing them the breathing space needed to move forward.

#Construction invoice factoring free#

This highly flexible form of borrowing can be used to free up funds from your debtor book, relieving the pressure placed on your cash flow. In 2021 the number of lenders total three, Bibby, Ultimate and 4Syte Construction Finance. The number of invoice finance lenders that support the construction industry in the UK has been declining as lenders move out of the space due to fraud. It is an area of business borrowing that has been under-utilised in recent years. Invoice Factoring for a construction business is a commercial finance product which is used to release funds to a business, with outstanding invoices used as security.

5.4 Can Construction Factoring help my business?.

5.3 How can invoice factoring benefit my construction business?.

2 How does Construction Invoice Factoring work.