A bespoke, specialist solution tailored for your Construction Business
Construction Finance with The Business Board offers working capital solutions for construction companies including sub contractors who provide services under a contract, framework agreement or purchase order.
Particularly problematic for businesses within the construction sector are poor payment practices such as late payment. For businesses working on projects that have high labour and material costs this seriously affects cashflow.
Construction finance allows a business to access funding against the value of outstanding customer billing before it is paid to ensure they have the funding they need to deliver throughout the various stages of a contract.
Access to a specialist team including quantity surveyors who can review contracts will be provided and contractual debt including uncertified applications for payment can be funded.
The below section briefly shows some key results of an annual sub contracting 2019 growth report giving a unique insight into the UK construction industry…
“£175,951: Average value of contracts, compared to £130,968 in 2018 “
At a time when Brexit and its impact on the economy is dominating headlines, the report reveals that subcontractors are not immune from the uncertainty and disruption being caused. Brexit is seen as the biggest threat to subcontractors in 2019, with larger firms the most concerned. And 89% of surveyed subcontractors are calling on the Government to act to restore confidence.
Linked with fears around labour shortages and rising costs, it’s unsurprising that Brexit is the primary threat to the sector, with a quarter of respondents (25%) citing it as their main challenge. Yet subcontractors are also facing commercial pressure from decreasing work volumes (13%).
Key Findings in 2019
• 19 weeks: Average amount of work in the pipeline, compared to 27 weeks last year
• £175,951: Average value of contracts, compared to £130,968 in 2018
• 17% use unsecured sources of funding (personal savings or loans from friends and family)
• £10,641: Average amount written off in bad debt
• One in four do not always thoroughly check the contracts they are signing
• 48% say contracts are difficult to understand
• 55% have to accept contracts or risk losing business
A quarter (25%) of subcontractors see Brexit as the biggest threat to their business with larger businesses the most likely to cite this as their biggest threat. This is likely driven by the exposure that bigger businesses have from negative economic headwinds linked to Brexit, such as those that rely on trade or employ labour sourced from overseas.
The weaker pound is another factor adversely affecting businesses across the board. It has increased the cost of importing raw materials, and so it is no surprise to see that more than one in ten (12%) subcontractors, with a turnover of £5m plus, are the most affected by this as they tend to purchase more materials.
The research revealed other threats, including fears linked to a lack in demand / decrease in work (13%), the UK economy (8%) and skills shortages (8%). Whatever the future holds, ambitious subcontractors should look to use different forms of funding to help them reach new goals and achieve bigger and better things for their busines
If you are interested in finding out more about our Construction Finance Solutions, email us at: firstname.lastname@example.org or call our office on 0118 338 1818.
We look forward to speaking with you.