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Construction Invoice Finance

Receive up to 90% of your invoice value 

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Commercial Finance

As a specialist finance broker, Clifton Private Finance provides high-quality construction invoice finance solutions tailored to the unique needs of UK construction businesses. We understand the challenges contractors, subcontractors, and other firms in the sector face in managing cash flow while awaiting payments for completed work or project milestones.

  • Construction Invoice Finance solutions for businesses with annual turnover from £50,000 to £10 million
  • Cash advance within 24 hours
  • Business finance options also include asset-based lending and asset finance
  • Our solutions come with dedicated client manager support
  • We are independent from any one lender, and compare rates and terms across the entire market on your behalf

Our solutions are designed to bridge the gap between carrying out work and receiving payment, ensuring your construction business has the working capital to pay staff, purchase materials, hire equipment, and cover other operational costs without delays.

Call us on 0203 900 4322 to discuss tailored construction invoice finance for your firm.

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What is Construction Invoice Finance?

Construction invoice finance, also known as construction factoring, is a specialised form of invoice financing that caters to the cash flow needs of the UK construction sector. It allows contractors, subcontractors, and other industry businesses to unlock the cash tied up in their unpaid invoices or applications for payment.

By using outstanding invoices as collateral, construction firms can access upfront working capital to cover expenses like labour, materials, and equipment hire – bridging the gap between completing work and receiving payment from main contractors or clients.

How Does Construction Invoice Finance Work?

The process is straightforward:

  • Your construction business raises invoices or submits applications for payment (certified or uncertified) upon completing work or reaching project milestones.

  • Instead of waiting extended periods for payment, you submit these unpaid invoices/applications to a construction invoice finance provider.

  • Within 24-48 hours, the provider advances you a significant percentage (typically 70-95%) of the total invoice value as upfront cash.

  • You use this cash injection to pay staff, suppliers, and cover other costs – ensuring projects stay on track.

  • Once your client pays the original invoice, the finance provider releases the remaining balance to you, minus their fees (usually 1-3% of the invoice value - we will negotiate the lowest rate on your behalf).

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Key Benefits of Construction Invoice Finance

  • Improved Cash Flow -  Gain immediate access to cash tied up in unpaid invoices/applications, enabling you to pay staff, suppliers, and other expenses on time – without disruptions.
  • Flexibility and Scalability - The available funding grows alongside your sales and construction workload, making it suitable for rapidly expanding businesses seizing new opportunities.
  • Bad Debt Protection - Some providers offer bad debt protection as part of their construction finance facilities, mitigating the risk of client insolvency or non-payment.
  • Back-Office Support -  Many finance companies provide additional services like credit control, payroll processing, and invoice management – allowing your team to focus on core construction activities.

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Common Payment Terms in the Construction Industry

In the construction sector, it's typical for main contractors or clients to have extended payment terms of 60, 90 days or even longer for settling invoices or applications for payment from subcontractors and suppliers.

While the UK government mandates a standard 30-day payment period, many larger construction firms impose their own protracted payment schedules that align with their accounting processes and cash flow management.

This creates a significant cash flow gap for subcontractors, contractors, and suppliers, who must pay their workforce, purchase materials, and cover various operational expenses on an ongoing basis – despite having to wait months to receive payment for work completed.

Major construction clients are often unwilling to modify their payment terms to accommodate the needs of their subcontractors and suppliers, leaving many construction businesses struggling to bridge the gap between paying upfront costs and receiving compensation for finished projects.

It's not uncommon for construction firms to take on large-scale projects or high-volume work, only to then face an extended delay of several months before receiving the sizeable payments owed for their completed contracts and invoices.

Construction invoice finance provides a solution tailored to these industry challenges, enabling construction businesses to maintain positive cash flow and meet financial obligations without cash shortages caused by slow-paying clients and lengthy payment terms.

Watch our video below to learn how construction invoice finance can help your firm overcome cash flow gaps stemming from extended payment periods in the industry.

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Construction Finance Options: Factoring vs Discounting

Businesses can choose between two main types of construction invoice finance:

Invoice Factoring

With invoice factoring, you sell your outstanding invoices to the finance provider at a discount. They take over credit control and collections from your clients. This option is admin-light but means your clients deal directly with the funder.

Invoice Discounting

Discounting allows you to retain control of customer relationships and collections. The finance facility is confidential, with clients continuing to pay your business directly. This option requires more admin but can help maintain good customer relationships.

At Clifton Private Finance, we work with specialised construction invoice finance providers and traditional funders to find the ideal solution for your business requirements.

Read more: The advantages and disadvantages of invoice discounting

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FAQs: Construction Invoice Finance

What are the costs involved in Construction Invoice Finance?

Finance fees typically range from 1-3% of the total invoice value funded. Our brokers negotiate to secure you the most competitive rates and transparent pricing.

Is bad debt protection included?

Many providers offer bad debt protection as part of their construction finance facilities at no extra cost, safeguarding you against client insolvencies.

How quickly can I access funds?

Leading construction finance companies can advance cash within 24-48 hours of receiving your invoices or applications for payment.

Can I use it for certified and uncertified payments?

Yes, construction invoice finance covers both certified and uncertified applications for payment, as well as standard invoices for completed works.

Do I need to change who I invoice?

With invoice discounting, there's no need to change your invoicing process. Your clients continue paying your business directly, maintaining good working relationships.

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Unlock Your Construction Firm's Potential

At Clifton Private Finance, we are committed to finding the ideal construction invoice finance solution to address your business's unique requirements and cash flow challenges.

Our exceptional team provides:

  • Market-leading rates
  • Fast service – finance within 5-7 days
  • Access to specialised construction finance providers
  • Professional guidance and support

Call us today on 0203 900 4322 or request a consultation to discuss how construction invoice finance can benefit your firm.

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If you have any questions about our services or want to start making things happen please contact us