The Industry’s Unique Cash‑Flow Challenges
In the building and trade game, cash flow is king. You might be juggling multiple projects at once – paying for materials, wages and compliance costs – while waiting weeks or months for clients to settle their accounts. Traditional banks don’t always move as quickly as you need them to, so it pays to look at alternative funding solutions.
Construction firms and tradespeople face their own set of hurdles. Payment terms often stretch to 30, 60 or 90 days, retentions tie up a percentage of your invoice until the job’s finished, and variations can blow out budgets. Meanwhile, you’ve got suppliers and subcontractors expecting prompt payment. These delays create cash‑flow gaps that can stall growth or force you into taking on debt that isn’t friendly.
Conventional vs. Alternative Finance Options
Overdrafts and unsecured business loans are the most common ways to plug short‑term gaps, but they come with strict eligibility criteria and often require property as security. By contrast, alternatives like trade finance and invoice finance don’t tie up your home and can be arranged more quickly.
Trade finance helps pay suppliers upfront so you can order materials in bulk; and invoice finance uses your invoices as security whilst advancing you the funds you need to keep going.
If you need a more permanent stream of funding, you can look at other private loans here or consider a second mortgage loan / 2nd mortgage.
InvoiceFinance As A Viable Solution
Invoice financing suits businesses where cash flow timing doesn’t always match outgoing expenses. Rather than waiting until your customer pays, you receive an advance on a large portion of the invoice value, usually between 80 and 90 per cent. Because your outstanding invoices are used as security, there’s no need for property as collateral with good invoice financiers.
More Importantly with good invoice financiers you can get a confidential invoice financing facility that your clients aren’t aware of. So your relationships stay intact and collections remain in your hands.
Considerations When Choosing a Finance Partner
Not all lenders are equal. Look for a partner who can move quickly – same‑day drawdowns and who is transparent about fees. It also helps to work with specialists who understand the peaks and troughs of construction and trades, and who can work behind existing bank security arrangements. A good provider should have a track record of supporting businesses through growth phases, not just offering transactional funding.
How our financing services can help
At Royce Stone Capital we work directly with family office and private wholesale funds. This lets us bypass the red tape you’d expect from bigger institutions like banks and most second tiers. We can ensure you get tailored debtor finance facilities without asking you to mortgage your house.
Our partners are comfortable ranking behind your bank if you already have senior debt in place, and they pride themselves on discretion – your clients won’t know we’re involved.
Most importantly, these facilities can scale as your business takes on bigger contracts, so you’re never held back by a lack of working capital.
Cash flow issues shouldn’t slow you down
Cash‑flow problems shouldn’t force you to turn down good work. With the right funding solution, you can keep your projects on track, pay your team on time and negotiate better terms with suppliers.
If you’d like to explore how our private invoice finance facilities can support your business without tying up property security, feel free to contact us here. Our team is always happy to talk through your options and tailor a plan that works for you.
To read more about invoice financing click here.
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