Cost-effective answers for suppliers commissioning and installing utilities

Organising utility connections can be difficult on any scale of project. Providing water, drainage, gas and electrical connections is vital, and now broadband via copper or fibre is joining the list.

The National Federation of Builders (NFB) makes a regular survey of the levels of service that contractors experience when seeking new connections from electricity, gas or water companies. On larger schemes, the costs of providing multiple connections, and the design, planning and construction of physical infrastructures such as pipelines, cables and switchgear can mean costly delays. There are also significant costs for the work itself.

There will always be costs for connections and supporting works carried out by the utility companies. On greenfield schemes where network extension works are necessary, the developer will usually have to pay the full cost, not just for the construction and connection but for legal agreements such as wayleaves.

Developers may have to pay months in advance for a service to be connected.

At Rangewell, we can help you find solutions to the need to funds utilities connections.

As a builder or contractor, it means you can:

• Avoid the need to find cash upfront - avoiding cashflow issues
• Spread or delay repayments until you are paid for the work
• Take on any scale of project

As a developer, it means you can:

• Provide for any connection cost
• Avoid making additional demands on capital
• Avoid additional calls on existing lenders

Funding for all types of utilities

On a domestic project in an area already served, connections costs may not be too large to deal with. But on major developments with dozens, or even hundreds, of homes, those costs will be substantial, especially if the existing network is judged to be inadequate:

• Water
• Sewage
• Power
• Gas
• District heat/energy
• Broadband and telecoms

Finding funding options with Rangewell

Many lenders find providing finance for property developers is outside their areas of expertise. At Rangewell we know lenders who will work in the sector, and can provide cost-effective funding options for your needs - whether you are a developer or contractor - including:

• Unsecured loans
• Secured loans
• Contract funding

Lending can provide a cost-effective solution in some circumstances - talking to a Rangewell expert will help you decide if they are right for you.

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 electrical supplies you need.

Unsecured business 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 - providing a solution for main contractors

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.

Development loans - providing funding for developers

Property Development lending ranges from small-scale funding for individual domestic refurbishments to complex finance for major mixed-use developments providing multiple new homes, and may be available whether you are a sole trader, limited company or LLP.

Property Development Finance includes a wide range of solutions, with lending secured on land value or on the property itself. Loan terms are flexible from 1 – 12 months and arrangements with no monthly interest payments may be available. Lending arrangements can include a roll-up of interest and associated costs into the loan, which would be paid off once the development is sold.

It may be possible to arrange a Development Loan to cover the specific needs of utilities provision.

How we help you capitalise your 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, including specialised construction finance.

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, we can help you find Alternative Funding, using new loan providers and styles of funding.

Whether you have a straightforward finance need, or require a complicated ‘Jigsaw’ funding plan made up of a combination of lending types, we have the answers you need.

Simply call us now to find out more - from development to JTC contract funding and more.