The construction industry in the UK is a dynamic sector that plays a pivotal role in the nation's infrastructure and economic development. However, like any other industry, it requires substantial funding to thrive and reach its full potential. In this blog post, we will explore various funding options for construction businesses and discuss how Greenwood Capital can provide bespoke and flexible financial solutions to support their growth.
Refinancing Current Facilities
Refinancing is a strategic financial move that allows construction companies to optimize their existing debt. It involves renegotiating the terms and interest rates of current loans to reduce monthly payments. This can free up valuable working capital that can be reinvested into the business for expansion, hiring, or equipment upgrades providing a funding solution that allows you to circle back and utilise more appropriate funding techniques for other elements of the construction sector.
For construction firms, refinancing can be a game-changer. By working with Greenwood Capital, businesses can restructure their existing debts, taking advantage of lower interest rates and extended payment terms, making it easier to manage their financial commitments.
Financing New Plant and Machinery
The construction industry heavily relies on advanced equipment and machinery to carry out projects efficiently. However, acquiring new machinery can be a significant financial burden. Greenwood Capital offers tailored funding solutions such as asset backed finance to support the purchase of new plant and machinery. With financing options, construction companies can spread the cost of equipment over time, preserving cash flow and allowing them to stay competitive in the industry. Whether it's earthmoving equipment, cranes, or specialized tools, Greenwood Capital can help businesses secure the assets they need to take on larger and more lucrative projects.
Invoice Finance
Late payments from clients can severely impact the cash flow of construction businesses. Invoice finance, also known as factoring or invoice discounting, is a solution that allows companies to access a significant portion of the funds tied up in unpaid invoices. Greenwood Capital can assist construction firms in implementing an invoice finance strategy.
This approach ensures that businesses have a predictable cash flow, making it easier to meet operational expenses and invest in growth opportunities. It provides financial stability, especially in the construction industry, where project timelines can be unpredictable, and cash flow challenges are common.
Development Finance
For construction companies looking to embark on ambitious projects, development finance is a vital tool. Greenwood Capital offers specialized financing solutions tailored to the unique needs of property developers and construction firms. This funding can cover various expenses, from land acquisition and planning permissions to construction costs and marketing. By taking a face to face bespoke approach, we can tailor that funding to meet the needs of the business on a ‘just in time’ basis so that the funding lands when it is needed so that the business isn’t committed to or hamstrung by funding commitments.
With development finance, construction businesses can take on larger and more profitable projects without exhausting their existing resources. This funding option supports the growth and expansion of companies in the sector.
Why Choose Greenwood Capital?
Greenwood Capital is a trusted financial partner for construction businesses in the UK. Our commitment to providing bespoke and flexible financial solutions sets us apart. We understand that every construction company has unique needs and challenges, and we work closely with our clients to create a tailored financing plan that suits their specific requirements.
Our team of financial experts has extensive experience in the construction industry, ensuring that we can provide insights and guidance that are truly valuable. We aim to be more than just a lender; we strive to be a partner in our clients' success.
Economic impact
Construction is one of the UK’s major industries. In 2022, it drove 6.2% of the UK’s GVA (Gross Value Added), a measurement which tracks the increase in economic value due to a sector’s production or services. The GVA takes into account production costs, excluding labour. This means that, outside of services which are the UK’s biggest earners such as retail, financial and healthcare – the construction industry is the second-most profitable sector after manufacturing. In 2021, infrastructure growth increased by £7.3 billion compared to 2020 figures. £5.6 billion of this was new road development, with the rest primarily invested in improving train travel so with the recent changes in plans for HS2, the sector is perhaps not as healthy as it has been and as a result funding for the construction sector can be harder to find.
In the UK construction industry, funding is the lifeblood that enables businesses to grow, invest in new equipment, and take on ambitious projects. Greenwood Capital offers a range of financing options, including refinancing, equipment financing, invoice finance, and development finance, to support the unique needs of construction companies.
With a dedication to providing bespoke and flexible financial solutions, Greenwood Capital stands ready to help construction firms thrive in a competitive and dynamic industry. By partnering with Greenwood Capital, businesses can unlock new opportunities and reach new heights of success in the construction sector.
We help SME’s nationwide; from companies turning over £50,000 per annum to businesses turning over £20,000,000. Our clients may need to borrow money to fund a new venture, expand their existing business, launch a new product or just assist with cash-flow. Whatever their goal, we aim to help them achieve it.
Finance options for our clients
We specialise in working out the best avenue for the company based on current financials/needs/affordability. We have a panel of 50+ lenders who all specialise in different facilities, whether that be an overdraft system as opposed to a traditional monthly term, making the client as comfortable as possible. Construction funding. We work closely with a wide range of construction firms and plant hire companies across the UK. Our passionate team of specialists are on hand to assist directors of companies in these sectors grow and build their business. We provide a range of financial solutions to help these businesses, including refinancing of current facilities to reduce monthly payments, financing of new plant and machinery, invoice finance, and development finance. Whatever the specific needs of each business, we are dedicated to providing bespoke and flexible financial solutions to help them thrive.
How long will it take to raise finance?
This does vary depending what finance option our clients are exploring. If you’ve got all the documentation ready, it’s often possible to get the deal done within a day or two. Secured finance against a property is typically a longer process and we like to allow 3 -4 weeks for funds to be deposited.
What products are available?
Types of commercial finance available include bank term loans, invoice finance, hire purchase, equipment leasing, commercial mortgages, property development finance, peer-to-peer lending, revenue loans, and online short-term lenders, as well as governmentbacked start-up loans and not-for-profit social lenders.
Will you do a credit check?
Our clients will never be credit checked by a lender we work with unless they have given their explicit consent. Personal credit checks are highly regulated, and clients have rights as an individual for their personal data to be protected.
Will you recommend a product?
No, we cannot recommend products and we don’t give financial advice. Our service is all about finding the funding options that our clients business is eligible for, and matching them with their requirements and requests. We can give information on each of their options, explain how they work, and clarify exactly what they’d be agreeing to; but they will have to make the decision.
How do you make money?
Normally, the cost to our customers is the same as if they’d gone direct to the lender. We’re happy to disclose further commission details on request – if there’s anything else you’d like to know, feel free to get in touch.
Can you help start-up’s?
We endeavour to help every UK business, but start-up’s can be a little more challenging to help because they don’t have a track record or any assets to secure lending against. Some lenders won’t lend to start-up’s, but since we work with over 50 finance providers there are often other ways of getting funding but it may mean signing a Personal Guarantee for example.
Bridging Facilities
A commercial bridging loan is a type of short-term financing—12 months or less—that provides an immediate cash boost while you wait for longer-term funding. Used to “bridge the gap,” financially, commercial bridge loans are used by business owners who want to buy office space or commercial property, while waiting for the sales proceeds from selling their current business premises, or until they have a more permanent commercial loan in place, i.e. a commercial mortgage.
Asset Finance / Refinance Asset finance
This is a popular method of borrowing money by using a company’s assets like stock or accounts receivable, as security against a new loan. It’s a quick and convenient way to get plant and machinery, and, or vehicles, without making a hefty upfront payment. We also can look to refinance and improve our clients current asset finance facilities by either extending their term or shrinking monthly payments.
Secured Finance
Businesses operating in asset-heavy industries with a demonstrable trading history might be more inclined to get a secured business loan. Often cheaper than unsecured finance, this form of business lending requires a business owner to provide assets such as property, plant, and machinery as security. The risk to the lender is significantly reduced, which means lower interest rates and better repayment terms.
Invoice Finance
For businesses that offer credit terms to their customers, invoice finance is a common type of working capital finance. Along with other types of receivables finance, invoice finance is based on money owed to your business, and you normally get a percentage of the value owed via one invoice or the entire debtor book.
Unsecured Finance
An unsecured loan is a flexible approach to borrowing, that allows a business owner, sole trader, or limited company to get instant cash, without using valuable assets such as property, equipment or machinery.
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