Factoring for construction industry companies including subcontractors has often been difficult or impossible to arrange due partly to the contractual nature of the construction industry and partly to the fact that the JCT contracts that many of the construction companies use don’t give the factoring companies the title to the debts that they need as security as most factoring companies will only accept invoices when the service has been fully completed and not applications for payment partway through a contract.
Some factoring companies have historically offered invoice finance facilities begrudgingly to sub contractors in the construction industry but only in a half hearted manner as long as the company invoices in full when the job is complete. This may work well for a few construction subcontractors but the problems start to arise when the company is offered work on a contract basis and the factoring company refuses to fund it.
Fortunately that situation has changed in the last two or three years and construction industry finance is now more readily available as there are several factoring companies that now not only offer both factoring and invoice discounting facilities to construction companies but actively welcome business from companies in that sector.
Additionally there are one or two factoring companies who will offer single invoice also known as spot factoring to companies in the construction industry too and they are also happy to fund applications for payment as well as invoices.
Spot factoring is often more suitable for construction industry subcontractors than other market sectors as many of the small to medium sized subcontractors work on one or two contracts at a time rather than having the good spread of customers that traditional invoice finance companies look for.
There are other advantages to subcontractors of spot factoring as the funders don’t insist on lengthy contracts or minimum fees so that the subcontractor can dip in and out of their factoring facility as and when required with no financial penalty if they don’t use it.
Factoring Solutions is the UK’s leading independent specialist factoring broker with industry experience going back several decades. We deal with relatively few of the large number of players in the factoring arena as most do not live up to the high standards or transparency that we insist on.
There are no charges for our services so for an informal chat without any obligation why not contact us on 01827 707680 to discuss your specific requirements
Construction Industry Factoring Solutions
Torridge, Tamworth B77 5QL
01827 707680or by email to info@factoringconstruction.co.uk