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• 31 Jul

  Funding Both Invoices And Applications For Payment In Construction

  Within the construction sector for both invoices and applications for payment are billing methodologies that are commonly used - hence suppliers can require funding against both.

  Funding Sales Invoices And Applications For Payment

  We have conducted research that has suggested that approximately 75% of construction sector businesses use applications for payment, with 25% raising standard credit invoices. It is not necessarily the case that a company will use either one system or the other.

  Funding Restrictions Where Apps Are Not Funded

  There are some businesses that are operating both systems, often for different debtors, or for different projects. This can present a funding issue if the construction sector company is using a traditional invoice finance company, that will not fund against the applications. There are only a handful of funders in the UK that will finance sales within the construction sector. This is due to the specialist knowledge that is required to value those sales, account for contractual issues, and ensure that they are able to recover their funding from the end customer.

  We came across this recently with a prospect that was using a relatively new invoice funding company. The funder were only financing the credit invoices raised by the company. Any applications were excluded from the facility, so were not attracting any funding and that was impacting the cash flow of the company.

  A Funder That Will Finance Both Invoices And Apps

  We introduced them to an alternative invoice funder that was able to fund against both the credit invoices and the applications. This had the effect of releasing additional finance for the business - injecting more working capital into their cash flow.

  If your invoice finance company aren't able to fund both your sales invoices and apps, please contact Sean on 03330 113622, and he will introduce you to an alternative funder that can finance both - boosting your available working capital.

  By Glenn Blackman