Common funding needs in the construction sector
- Purchasing or refinancing plant, machinery and commercial vehicles
- Funding labour and materials between certifications
- Managing CIS deductions, VAT and PAYE cashflow
- Bridging retentions on completed projects
- Development finance for refurbishment and ground-up projects
- Buying or refinancing yards, workshops and storage
Finance types that usually fit
Based on how UK lenders typically underwrite this sector, the following finance categories are the most common fit:
Asset Finance
Finance to buy/refinance equipment, vehicles or machinery.
Invoice Finance
Funding advanced against unpaid B2B invoices.
Unsecured Business Loan
Term loan or credit line repaid through fixed instalments.
Bridging Finance
Short-term property-backed finance.
Sector-specific eligibility blockers
- Many invoice finance lenders restrict construction due to pay-when-paid and contractual set-off
- Stage-payment contracts complicate single-invoice finance
- Concentration on one main contractor reduces invoice finance advance rates
- Owner-managed sole traders with limited accounting infrastructure
- Adverse credit history common in cyclical sub-sectors
How routing usually works in construction
Construction routing requires sector-aware lenders. For asset finance, mainstream providers like Lombard, Novuna and Propel cover plant and vehicles routinely. For invoice finance, only some providers — notably Bibby, Skipton Business Finance and Time Finance — are confident with construction's pay-when-paid and retention dynamics; many mainstream IF lenders restrict the sector or apply lower advance rates. Unsecured working capital is available to established firms via iwoca, Funding Circle and similar. Property development and refurbishment route to bridging lenders such as Together, Hampshire Trust Bank or United Trust Bank with development experience.
UK lenders active in construction
The lenders below publish criteria consistent with funding businesses in this sector. Final approval is always subject to lender underwriting.
Lombard
Asset finance / HP
- Amount
- £25k+
- Speed
- Not disclosed
- Security / PG
- Security/guarantees may be required
- Data confidence
- Medium
Novuna Business Finance
Asset finance
- Amount
- Not disclosed
- Speed
- Not disclosed
- Security / PG
- Asset-backed
- Data confidence
- High
Simply Asset Finance
Asset finance
- Amount
- £15k–£5m
- Speed
- Not disclosed
- Security / PG
- Asset-backed
- Data confidence
- High
Bibby
Factoring / invoice discounting
- Amount
- Not disclosed
- Speed
- Not disclosed
- Security / PG
- Invoice-backed
- Data confidence
- Medium
Skipton Business Finance
Factoring / discounting
- Amount
- Up to 90% invoice advance
- Speed
- Not disclosed
- Security / PG
- Invoice-backed
- Data confidence
- Medium
iwoca
Business loan / credit line
- Amount
- £1k–£1m
- Speed
- Instant/same-day for many
- Security / PG
- Unsecured positioning
- Data confidence
- High
Together
Bridging / commercial mortgage
- Amount
- Property-backed; commercial can reach 100% with extra security
- Speed
- Can complete in 24h
- Security / PG
- Property-backed
- Data confidence
- High
Frequently asked questions
- Can a construction firm use invoice finance?
- Yes, but the lender pool is narrower than for general B2B. Look for providers with explicit construction experience — Bibby, Skipton Business Finance and Time Finance are commonly cited. Expect lower advance rates than non-construction sectors because of retentions and pay-when-paid clauses.
- What asset finance is available for construction plant?
- Hire purchase and lease arrangements cover excavators, diggers, dumpers, scaffolding, telehandlers, generators and commercial vehicles. New and used plant is fundable. Specialist asset finance providers underwrite the residual value of the kit.
- Can a sole trader subcontractor get finance?
- Yes, particularly for vehicles, tools and small plant via asset finance. Unsecured loans are harder without limited company accounts but are available from some lenders if the personal credit file and CIS records are clean.
- How does CIS deduction affect lending decisions?
- Lenders model gross turnover before CIS deductions when assessing affordability. Some require evidence of CIS returns and HMRC reconciliations. Net cashflow visible on bank statements is also weighted.
- Can I get development finance for a small refurbishment?
- Yes. Bridging and refurbishment finance from specialist lenders covers light refurb (no structural works) and heavy refurb (structural or change of use). Funding can be issued in tranches against milestones.
Related use cases
Eligibility checks for this sector
Each finance type has its own eligibility signals. The pages below explain what UK lenders typically look at — criteria can change and final decisions are subject to lender underwriting.