Without access to cash there will be many companies working on construction projects in areas such as Timber building and glazing, Groundworks, M@E, Flooring, Refurbishments who will not be able to exploit the new opportunities. Even with Funding for Lending, smaller companies will struggle to raise finance for new projects, and to make matters worse they will be worried about late payments in a sector which is beset with problems caused by customers paying late.
The nature of the business presents a seemingly impossible challenge for traditional lenders which is why Nucleus Commercial Finance has launched a specific Construction Finance cash flow funding product to help smaller companies. Working directly in partnership with a team of experienced Quantity Surveyors who understand the intricacies of building contracts, Construction Finance uses a fixed rather than a variable fee model, and to remove all uncertainty for companies, there is total transparency on all costs.
The new product is based on a traditional factoring approach whereby a company is advanced a percentage of an invoice it has yet to be paid for. It means that a business does not have to wait to be paid, which in many cases can be 120 days or even longer, and gives the company the ability to plan ahead.
According to Managing Director Chirag Shah: “One of the biggest challenges faced by companies working on construction projects is cash flow. With Construction Finance we believe we have created an innovative funding solution that is both practical and sustainable. It provides pre-payments against applications, stage payments and milestones for sub-contractors working on construction projects where contracts with their customers have been a barrier to finance from traditional lenders.”
