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Posts Tagged ‘Construction Finance’

Confidential Factoring organised for sub contractor

Monday, July 1st, 2013

XL Business Finance has recently sourced a confidential factoring facility to a mechanical and electrical sub contractor.

The business had secured new contracts and the next 12 months forecasts suggested an increase in turnover to £3m up from £2m. Due to the highly contractual nature of the debt  the business could not go to their bank for an increase in overdraft  and they were also told factoring or invoice discounting was not an option. Currently there are at least 5 independent factoring companies providing contract finance and all provide a slightly different take on the facility.

XL Business Finance understands this market inside out and for any business requiring finance against applications rather than invoices we can help. Contact us today Manchester, 0161 980 0577, London 020 3301 4540

Business Finance for the construction industry

Tuesday, January 10th, 2012

Anyone involved in the instruction industry will know how difficult it is to obtain working capital facilities. Due to the contractual nature of invoicing and applications for payment traditional forms of invoice finance are not available. The good news is that there are two or three independent finance companies that can provide funding against contractual debt and application for payments.

Specialist invoice finance companies use their own QS’s to asses work and provide funding that traditionally isn’t available via the high street banks. Whilst prepayments might not be as high as traditional invoice finance and factoring facilities the ability to get 50 or 60% of outstanding payments provides vital working capital for many businesses. As with any form of business finance the finance companies in question are all very different animals and provide slightly different forms of funding. XL Business Finance with over 12 years of experience can help you with speaking to the right funder.

 

 

How to obtain construction finance

Tuesday, February 15th, 2011

Many construction companies are prevented from obtaining traditional bank and invoice finance due to the contractual nature of their work. Mention contracts to 99% of the the UKs based factoring and invoice discounting companies and they will run a mile.

Banks may provide overdraft facilities based on the strength of the business and the available security. Traditionally banks are secure overdraft borrowings  against bricks and mortar. Therefore the size of any available facility is limited by the value of the available security. More often than not this is not enough for a construction finance to obtain adequate working capital.

The good news is that there are a couple of of bespoke funding facilities that provide funding against contractual debts. The products vary from funder to funder and the level of funding available depends on the nature of your business and the the contracts that you have in place. Funding can be approved on  application rather than approved application depending upon the finance company involved. Some of the finance companies even have their own in house quantative surveyors to make sure that the amount of the application is realistic in terms of the work undertaken to date. The percentage of the prepayment will again vary depending on the nature of the business and the contracts. Whilst 80% funding is not realist on average funding between 50-60% of the outstanding debtor book is more realistic.

Construction finance for contractors

Wednesday, November 3rd, 2010

One of the most common enquiries we get is for contract businesses looking for additional working capital to expand their businesses. The problem is that they have been to the bank and been refused an overdraft and they have been told they are ineligible for factoring or invoice discounting due to the nature of their contracts. The good news there are a number of invoice finance companies that other construction finance or contract finance.

We had such an enquiry just yesterday. As per normal the enquiry was for a different  however unsuitable form of finance. The enquirer had been told by a number of different sources that they were not eleigle for invoice finance and as such they had been trawling the inter net for business loans and approaching the banks for overdrafts. As we know the banks are\ still being over cautious resulting in a number of dead end enquires.

XL Business Finance with our ten years of experience in this sector was able to introduce a number of specialist funders that would be willing to fund invoices raised against contracts. Hopefully this will give the business the much needed working capital to grow and expand the business and take on more available contracts.