Why is Invoice Finance for construction businesses so important?
Running a business can be challenging – fact. Especially when it comes to managing cash flow. For example, just because your invoices state 30-day payment terms, often doesn’t mean the recipient will pay it in this time frame. Often businesses have their own payment terms and schedules to follow, which could leave you waiting for payment twice or even three times as long as you stated.
So, imagine if you could get your invoices paid on time, or even sooner. Using invoice finance for construction businesses can make this possible, and can even do so overnight.
What is Invoice Finance?
Invoice finance for construction businesses provides early access to the money owed to you in unpaid invoices. It is a way for businesses to borrow money against the amounts due from customers, ultimately providing a more steady cash flow. Invoice Finance allows you to receive a pre-agreed percentage of an invoice within 24 hours of raising it, often up to 90% of the invoice, with the rest being received from the lender once the customer has settled the invoice.
How Does it Work?
- Send the invoice to your customer with the usual payment terms and details.
- Forward a copy of the invoice to us for attention of the Invoice Finance lender.
- The lender will release the agreed % of funds to you.
- Once the customer has paid the invoice, the lender will release the remaining funds, minus the agreed fee.
It’s a straightforward process that can significantly improve your cash flow, allowing you to focus on growing your business rather than worrying about when your invoices will be paid.
It can also reduce the man power required for chasing invoices and managing credit control, should you choose to hand over that responsibility to the lender too. This is called Invoice Factoring. If you want to retain responsibility for credit control, that’s called Invoice Discounting.
Invoice Finance for Construction Companies
If you’re in the construction industry, delays in payments are common and long payment terms can strain your finances. Moorgate Finance have been working closely with construction companies since 2015, and we’ve seen firsthand how invoice finance can make a real difference.
How Can Invoice Finance Benefit Your Construction Company?
- Accelerated Cash Flow: Access funds tied up in unpaid invoices quickly, ensuring you have the cash you need to keep your projects running and take on new opportunities, without deal.
- Working Capital Boost: Improve your working capital without having to take on the burden of long-term debt.
- Reduced Risk: Lower the risk and impact of potential late payments and bad debts.
- No hassle payments: Let the lender handle payment collection and remove the nuisance and labour of chasing payments.
- Customer Flexibility: Offer longer payment terms for your customers, like 60 or 90 days, without putting your cash flow at risk.
Invoice Finance is more than just a financial tool — it’s a way to ensure your construction business stays agile, competitive, and ready to take on new opportunities without the constant worry of cash flow constraints.
You can even choose single or a selection of invoices to finance, as and when you need to. Speak to us about Selective and Spot Invoice Finance for construction if you’d like to select individual customers, for example those with extended payment terms or particularly large invoices, to place through an Invoice Finance agreement.
We support all types of businesses from large corporate companies to sole traders. Get in touch with our industry-specialist to see if you are eligible.
Apply Now to start the process, our team are ready to help!