Scaffolding finance

Before you can run a scaffolding business, you need to make a substantial initial investment. Your tubes, fittings, truck and insurance will all take capital investment and you will have operating costs to cover, with fuel and labour to pay for.  

You may even need to invest in marketing while you get your name known. You’ll need to find ways to deal with the extra costs from clients who want to pay the absolute minimum for the scaffolding they need - and who will take as long as possible to pay for it. 

To understand how to get the funding you need, it helps to look at the costs you face and to break them down into categories:

• Buying an existing scaffolding business
• Starting up a business
• Providing scaffold
• Providing a vehicle
• Funding your yard
• Dealing with insurance
• Supporting your cashflow 
• Dealing with tax

Buying an existing scaffolding business

The shortcut into owning a successful business is simply to buy one. If you can find an existing scaffolding business for sale, complete with tube, vehicles, yard and even a workforce - plus an existing client book - it could mean that you can start enjoying a good income right away.

The costs may seem high. The more successful the business you want to buy is the more you will need to pay for it. You will need to negotiate - but if the business has a record of successful operation going back a  few years, lenders may be able to look at the books and make a decision in your favour.

It can be easier for lenders to lend to buy a successful business even if the costs are high - and, at Rangewell, we can help you find the lenders that can offer the deals you need, keeping costs under control.

Starting up a scaffolding business

Starting up any new business can be a challenge and traditional bank loans may be particularly difficult to secure. Banks and other lenders prefer to deal with established businesses who can demonstrate a history of profits with several years accounts. As you are starting up, your business will have no trading history or accounts, which means you have no way to demonstrate that it will be able to repay a loan.

Fortunately, at Rangewell, we know that there are some lenders who may be willing to provide the funding you need to get your start-up business off the ground. Almost all will require security, and often a personal guarantee, but it is usually possible for us to find lenders with arrangements to meet your business needs - which will allow you to reduce your own need to provide cash.

Find out more about lending for start-up businesses.

Breaking down the costs

If you are starting up a scaffolding business, or if you are looking at expanding an existing operation there are a number of costs that you will need to cover. It can help to break these down into separate topics - because each type of cost may be best met with a specific type of funding. Getting the right type of finance can substantially reduce your costs.

Provide scaffold

Most business equipment can be funded with Asset Finance, where lending is secured on the assets themselves - but scaffolding may present some special challenges.

When you are looking to purchase new tube, banks and general funders may be reluctant to help, taking the view that scaffolding is not identifiable and, therefore, not suitable for conventional Asset Finance solutions where the funds to buy assets are secured on the assets themselves. 

Fortunately, we have a variety of cost-effective solutions for scaffolding businesses looking to buy new stock. Crucially, we can arrange the funding you need quickly and simply when you need to buy in extra equipment urgently to cope with a major new contract.

We know that you can buy scaffolding and count on finance deals from the supplier - we always aim to undercut those deals, with lease and HP that will cost you less - giving you a powerful business advantage.

You will probably want to acquire some poles, clamps, boards and special fittings secondhand - we can also help find Asset Funding for used equipment.

Find out more about Asset Finance for new and used equipment.

Provide a vehicle

You will need at least one vehicle to run your business. Your mileage will be relatively low, and a secondhand flatbed or dropside truck that you can fit out as you need to will be adequate, especially when you are starting out. 

We can offer solutions to spread the cost of the vehicle you need. We can frequently provide funding that will let you undercut the cost of funding offered by vehicle dealers. 

Find out more about vehicle finance for your scaffolding business.

Fund your yard

A secure yard where you can store vehicles and scaffold stock is essential for your business. We can provide solutions for renting - or help source Commercial Mortgage solutions which will let you buy the premises you operate from. Commercial Mortgages are a long-term commitment - but they can actually mean reducing costs compared with renting, and may offer the opportunity to build up a valuable asset for your scaffold business.

Find out more about commercial property finance.

Deal with insurance

Insurance cover will be a must for your scaffolding business. You’ll need employers’ liability insurance, which is designed to cover any compensation claims made against your business by your employees for any injury or damage that’s caused by their work. A fall or a crushing injury at work could mean your business would be held responsible - even if the cause was beyond your control.

You also need Public liability insurance to provide cover if your scaffold business is held responsible for injury or loss to clients or members of the public. For example, if someone’s car is damaged by a tool that falls from your scaffolding, or if a worker is injured by a fault on the scaffold you erected, it could pay out for the legal costs as well as any compensation.

As a scaffolder, the costs of the policy you need might be high. 

We can provide the necessary funding as part of a start-up package. 

Support your cashflow

Once you have started trading, you will still need finance.

The problem is cashflow. You will need to wait for weeks or even months to get paid, particularly with larger clients. You will need to raise invoices or payment, wait for them to be certified by a clerk of works and then wait for payment.

But you will still have to pay wages every week and cover your operating costs, whether you get paid or not.

Cashflow support and Working Capital Finance solutions can provide cash for the short term, and solutions such as Overdraft Replacement may be able to provide cash in an emergency.

Invoice Finance is where a lender will advance payment to you on the security of each invoice you issue. It can avoid all the problems caused by late payment, letting you have the cash you need each month or even each week. 

Find out more about Invoice Finance.

Helping your scaffold business deal with tax

When the work starts coming in, your scaffold business may face large quarterly VAT or annual tax demands. These can cause problems with cash flow and mean major costs that need to be paid without delay.

Tax Loans help you to spread the cost of your tax demands into affordable regular monthly payments. They can also help you avoid issues with HMRC, with the potential penalties and reputational damage that may entail.

Refinance your scaffolding business

The need for external finance does not end when your scaffolding business becomes established. At Rangewell, we can help you secure funding as your business operates and grows - and that can frequently involve refinance.

Refinancing is simply the replacement of an existing debt with another under different and usually very much better terms. A loan might be refinanced to take advantage of a better interest rate, providing a reduced monthly payment or a reduced term. So, if you already have loans, leases or other commitments in place the chances the chances are that you could replace them and improve your financial position by refinancing.

You simply take out a new loan with a better rate, and use it to pay off your existing loan.

Refinancing your Asset Finance arrangements might let you pay less each month for the equipment you use. 

The chances are that if you have had your existing arrangements in place for a year or so,  we can help you find a loan that works out cheaper each month - reducing your commitments and improving your cashflow.

You can find out more about refinancing here.

For large-scale funding needs, you may be able to refinance your premises with a Commercial Mortgage.

By remortgaging an existing property, your business can receive a cash lump sum comparable to its market value to use as you wish. So existing premises could be used to raise funds to acquire other property or to provide vital new equipment. You simply make monthly mortgage repayments until the property becomes yours again - and it is usually not necessary to have paid off the initial purchase of a property to be able to use it to raise funds in this way. 

Find out more about Commercial Refinance here.

Why Rangewell for your financial needs?

At Rangewell, our team is made up of finance experts who specialise in various sectors. Our construction team know the challenges scaffold businesses faces. Whether you have a straightforward finance need, or require a complicated ‘Jigsaw’ Funding plan made up of a combination of products, we can work with you to find the answers that are right for you and your plans for the future of your business.

Simply call us to get our expertise working for you.