Background

With ambitions to grow by 50% year-on-year, this construction company was rapidly expanding and taking on more projects in the commercial sector.

Despite strong growth, cash flow gaps remained an ongoing concern. The company issued invoices at key milestones or upon project completion, with standard industry payment terms of 30 to 60 days.

Funding request

Like many construction firms, their main assets were invoices, making invoice finance a possible solution to maintain steady cash flow.

However, operating in the construction sector put them at a disadvantage when seeking funding. Without physical assets or large cash reserves, many lenders were hesitant to offer support. Some were willing to provide invoice factoring, where invoices are sold to a lender that then collects payments directly from clients. But maintaining strong client relationships for repeat business was a priority for this company, making invoice factoring unsuitable. Even standard invoice discounting, which requires a shared-access bank account, was a step too far. They wanted a solution that would be entirely invisible to clients.

How we helped them RISE

Understanding their unique requirements, we sourced a lender willing to provide confidential selective invoice finance - a rare offering for a construction company. Within just a few days, the company was able to raise £120k against outstanding invoices, ensuring continued operations without disrupting client relationships.

While selective invoice finance typically comes at a higher cost (in this case 4% per 30 days) the confidentiality plus the flexibility to choose which invoices to submit made it the ideal solution. As the business continues its rapid growth, we are now exploring a whole turnover invoice discounting facility, which could be more cost-effective in the long-term.

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