Finance for the construction industry: building materials

Running a construction business means upfront labour and material costs that you need to take care of before you get paid for the job. A short contract could be complete before you receive any of the cash you are owed by your client.

That can mean a major problem. You may have the know-how and equipment to do the job, and have a workforce waiting - but you can’t afford to take the contract on, because you can’t finance the materials you need.

Even if you can find materials suppliers prepared to advance you credit, the chances are that their prices will reflect the costs of waiting for their payment. You could be paying more than you need for your building supplies.

At Rangewell, we believe there is a better solution. Negotiate the best price from your suppliers - and borrow the funds to pay in cash.

• You avoid the need to find cash upfront - in effect funding your clients' project
• You can spread the repayments until you are paid for the work
• You can afford to take on any scale of project
• You can avoid cashflow problems
• Work with clients with long payment terms,  or those who pay late
• Protect against customer insolvency with Bad Debt Protection
• You can negotiate larger discounts - increasing your competitiveness and profits

Funding for all types of building supplies

We can help you find funding for all types of building supplies, including:

• Steel framing systems
• Structural steels
• Mass concrete
• Composites
• Thermal protection and insulations
• Carpentry items - staircasing, windows
• Structural timber
• HVAC (Heating, ventilation and air conditioning)
• Electrical systems and equipment
• Flooring
• Surface finishing
• Bricks and blocks
• SIPS panels
• Roofing materials

Finding funding options with Rangewell

Many lenders find providing finance for the building industry difficult. At Rangewell we know lenders who will work in the sector, and can provide cost-effective funding options for your needs - whether you are the main contractor, specialist contractor or sub-contractor.

• Unsecured loans
• Secured loans
• Contract funding

There are two basic types of business loans, which can be used for any business purpose and can provide a simple way to provide the building supplies you need,

Unsecured Loans

Unsecured lending can be suitable for costs up to around £250,000. They operate much like a personal loan and will require a Personal Guarantee from the directors of your business. Rates start at around 6% and it may be possible to arrange repayments to fit your contract, including providing lump-sum repayments when your client pays you.

It may be possible to arrange an Unsecured Loan in a matter of days with some lenders.

Secured Loans

Secured Loans are ‘secured’ because the lender will require security in case you cannot pay the loan back. This could be your home or your business premises. They can be used to borrow large sums. Because security reduces the risk for lenders, interest rates tend to be significantly lower than Unsecured lending. Current rates may be as low as 2% over base rate.

Again, repayment terms can be agreed when you arrange your loan - although Secured Loans may take a little longer to arrange.

Contract Finance

Contract Finance acts to advance funds against your future billing - in effect using the value of your contract as the security for a loan, which you can use to pay for the supplies you need. It can even help protect your business against unexpected late payments or project delays.

With Contract Finance, the finance company will expect to see a detailed contract from a reputable end customer. They will want to ensure that your customer will be able to pay for the work once the contract has been completed. This means that it is the credit rating of your end customer, rather than that of your own business, which will be central to securing the finance you need. Working for a large organisation, such as a major developer, a local authority or a central government organisation, might all be ideal.

Contract Funding is considered riskier than purchase order or production finance as the client may need to fulfil the entire contract to be paid. Costs are therefore a little higher to reflect the additional risk.

How we help you capitalise your construction business 

At Rangewell, we work across the entire lending industry and our finance experts have personal experience in different business sectors. Our team knows the lenders who specialise in finance for the construction industry.

We put this knowledge to work for you, finding the most competitive deals for the supplies you need, It lets us ensure that we find you the most appropriate financial solutions you need to capitalise your business.

As well as conventional finance products and Purchase Order Finance, we can help you find Alternative Funding, using new loan providers and styles of funding.

Whether you have a straightforward finance need like a low cost secured business loan, a complicated ‘Jigsaw’ funding plan made up of a combination of lending types, or even JCT contract funding, we have the answers you need.

Simply call us now to find out more about any type of construction finance.