Construction Sector Finance

Construction finance explained, is quite simply is any form of finance facility needed within the construction industry and with
 several routes to funding you’ll never be short of options. Construction companies will often use a commercial finance broker so they can source the ideal funding solution, by placing you with right construction finance lender.

Construction finance facilities are most commonly used for the following:

What are my options within construction finance?

Hard assets

Asset Finance

Asset finance allows you to acquire new equipment such as heavy machinery, vans and equipment through a hire arrangement with the opportunity to spread the whole cost over the agreement or purchase the asset at the conclusion of the contract.
The following are some examples of company asset financing:

  • Leasing of equipment
  • Lease financing
  • Hire purchase

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Construction Business Loans

A construction business loan is the most flexible form of funding within the construction industry.
Typically unsecured with terms from 3-60 months, a tailored package can be put together to fit the needs of your business. Construction finance provides businesses with multiple funding options designed to fit construction companies vision and cash flow forecast. The total construction finance cost will be dependant on the product you chose, interest rate, advance and term.

A popular finance solution within construction is a secured business loan, which can be broken down into a few different finance products such as development finance and bridging finance. The UK property development market is currently on the rise, with many businesses and individuals looking for the ultimate finance package to support growth. A secured business loan can also be used if your business has a past history of bad debt.

Commercial finance brokers such as ourselves, have access to an online portal where we can quickly submit an application on your behalf, raising the capital finance needed as quickly as possible.

What can I use construction loans for?

Invoice Finance

Invoice finance, invoice factoring and invoice discounting are practises of borrowing money to offset the amount of unpaid invoices owed to your company by clients. This finance option, for which we have over 20 selective invoice finance lenders on our panel, helps businesses maintain cash flow by ensuring that suppliers and staff are paid on schedule and that daily business operations operate smoothly. You don’t have to spend time filling out applications for payment as we do all the hard work for you.

There are several reasons why the UK hospitality sector may seek business finance. These could range from acquiring initial capital to start a new enterprise or refurbish an existing one, securing cash flow loans to ensure smooth daily operations, or establishing a line of credit to manage cash flow during off-peak seasons. Other needs might involve substantial sums for expanding or acquiring new properties.

  • Invoice clients normally and upload the invoice to the lender online
  • Get paid instantly up to 95% of the invoice value
  • Chasing payments can either be done by yourself, or, if you choose, by the lender
  • When the client pays you, you pay the provider minus any fees and service charges

What are the benefits of construction finance?

Fast and flexible payment options

With over 250 lines of credit, we can access you funds for your business within 48 hours


Competitive interest rates

With over 250 lines of credit, you can be confident we are finding the best interest rate for your business

Unsecured Loans


Peace of mind that you don’t have to use any personal assets as security


Fixed repayments

Knowing exactly how much you are repaying each month can help with your cash flow forecast

Am I eligible for construction finance?

The criteria below should be met when applying for construction finance:

Smart Funding Solutions are authorised and regulated by the financial conduct authority, FRN: 972740.

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Frequently Asked Questions

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Construction finance is a specialised type of funding designed to support businesses within the construction industry. This financial solution helps cover the costs associated with materials, labour, equipment, or any other project-related expenses.

Businesses involved in various fields of construction – be it residential, commercial, or infrastructure – can apply for construction finance. This also includes developers, contractors, subcontractors, and companies providing construction-related services.

Construction finance can be used to cover a range of expenses including material costs, payroll and labour, equipment purchase or hire, site acquisition and development, or even to manage cash flow during various stages of a project.

Several financing options are available for construction businesses. These include working capital loans, plant or machinery loans, commercial mortgages for land purchase, and invoice finance for dealing with slow-paying clients.

Before applying, consider how much funding is needed and what it will be used for, your repayment ability, the project timeline, and the potential return on investment. It’s also essential to have a solid business plan and financial projections in place.

The procedure typically involves selecting a lender, presenting a detailed business plan, submitting a loan application along with supporting documents such as your financial statements, project details, and proof of your experience in the construction industry.

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Interest rates can vary depending on factors such as loan amount, term length, the lender’s policies, the borrower’s creditworthiness, market conditions, and whether the loan is secured or unsecured.

Many types of construction finance might require collateral or security, often in the form of a first-charge over a property, equipment, or other valuable business assets. Some forms of invoice finance, however, might require no collateral, depending on the lender’s terms.

While good credit simplifies securing finance, options might still be open for businesses with poor credit ratings. Specialist lenders or alternative finance options such as invoice finance might be considerations.

Yes, the UK government offers several initiatives to help businesses in the construction sector. For instance, the ‘Enterprise Finance Guarantee Scheme’ guarantees loans for small businesses lacking security.

The funding duration varies amongst lenders and loan types. While banks may take weeks or occasionally months, some online lenders specialise in swift processing, providing funds within days of approval.

This depends on your lender and your specific loan agreement. While some lenders could charge an early repayment fee, others do not. Always clarify these details with the lender before finalising your loan.

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