Lendus.

Invoice Finance for Construction Companies

Unlock cash tied up in long payment chains and retentions — keep your projects moving without waiting months for certified payments.

200+ UK lenders
2-minute application
No credit check to apply
FCA-regulated brokers

Rates

0.75% – 3.0%

of invoice value

Advance

Up to 85%

of invoice value

Facility Size

£50k – £10m

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Why construction businesses use invoice finance

Construction companies operate under some of the most challenging payment conditions of any UK industry. Certified applications for payment — known as 'apps' — can take 30 to 60 days to be approved, and retentions of 3–5% are routinely withheld for 12 months or more after practical completion. Subcontractors sit even further down the payment chain, often waiting 60–90 days while bearing significant upfront costs for labour, plant, and materials. Invoice finance bridges this gap by releasing cash against certified applications and approved invoices, giving construction businesses the working capital to take on new contracts, pay suppliers on time, and avoid the cash crises that cause so many small contractors to fail.

Finance types available

Invoice Factoring

Rate
0.75% - 2.5%
Advance
Up to 80%
Control
Factor collects from your clients

Best for: Smaller subcontractors or specialist trades that want to outsource credit control and don't have dedicated finance staff

Invoice Discounting

Rate
1.0% - 3.0%
Advance
Up to 85%
Control
You maintain client relationships

Best for: Main contractors and larger firms with robust credit control who need confidential funding without disrupting client relationships

Selective Invoice Finance

Rate
1.25% - 3.5%
Advance
Up to 80%
Control
Choose which invoices to finance

Best for: Construction businesses with a mix of fast and slow-paying clients who want flexibility to fund specific project drawdowns

Common challenges

Eligibility

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Market context

The UK construction sector contributes over £117 billion to the economy each year and employs approximately 2.4 million people. Late payment remains endemic, with the Federation of Master Builders reporting that 8 in 10 small construction firms experience late payment regularly. Retentions account for an estimated £10 billion of cash withheld across the industry at any one time, making working capital solutions critical to contractor survival.

Frequently asked questions

Can invoice finance be used against payment applications rather than final invoices?
Some specialist construction finance providers will advance against certified payment applications ('apps'), which is particularly useful for larger projects where formal invoices are only raised at the end of a stage. It is important to work with a lender experienced in construction payment cycles who understands the JCT and NEC contract structures.
What about retention — can I finance that too?
Standard invoice finance facilities do not cover retention amounts, as these are contingent on satisfactory completion and defects liability periods. However, specialist retention bond or insurance products exist separately. Some providers will advance against the non-retention portion of an application while retention is held back.
Will invoice finance work if I have multiple main contractors as clients?
Yes — most facilities will accept a diversified debtor book of multiple construction clients. Providers will assess each debtor's creditworthiness and may set concentration limits if one client represents a very large share of your turnover, but a spread of clients is generally viewed positively.
How does invoice finance interact with CSCS, CIS, and subcontractor deductions?
Construction Industry Scheme (CIS) deductions are a common concern. Your funder will need to understand your CIS position, but the deductions themselves do not prevent you from using invoice finance. Most construction-specialist providers are familiar with CIS and factor it into their assessment of your receivables.
How quickly can funds be released on a construction invoice?
Once a certified application or approved invoice has been submitted to the facility, most providers release the initial advance — typically 80–85% — within 24 to 48 hours. Speed depends partly on how quickly the debtor's credit can be verified and whether the invoice relates to a previously approved client.

Related industries

Engineering Manufacturing

Guides and resources

What Is Invoice Discounting? Factoring vs Discounting Invoice Finance vs Business Loan Best Factoring Companies

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