Invoice finance for construction companies and subcontractors
Construction invoice finance needs to fit the contract, not just the invoice total. Explore specialist assessment of eligible subcontractor debts and applications while labour and supplier payments fall due.
Positive Funding Limited is a finance broker. Funding is subject to provider assessment and agreed terms.
Find the payable balance behind the project value
Site activity creates costs before the payment cycle is complete. Applications, assessments and deductions can leave a subcontractor with a different cash position from the value shown in its order book.
Start with the contract and current payment documents. A provider needs to establish which receivables it can support; an application is not automatically equivalent to an approved, undisputed invoice.
Review payment documents
Show the application, assessment and notices relevant to the amount claimed.
Separate retained sums
Keep retentions and unresolved variations out of an assumed immediately available balance.
Forecast site expenditure
Allow for labour, supplier dates and the possibility of a lower assessed debt.
How construction receivables are assessed
Provide the subcontract position
Explain the work completed, amount claimed and payment status. Include relevant applications, approvals and deductions.
Agree a fundable amount
A specialist provider assesses the contract and counterparty before offering terms. Standard invoice facilities may not accept the same documents.
Reconcile the contractor payment
When payment arrives, compare it with the assessed debt and explain deductions. Advances and charges are reconciled under the facility.
Contract deductions can change availability
Retentions, disputed variations, contra charges and payment notices can affect the amount owed. Show the provider the actual documents and any dispute rather than assuming the entire application will be advanced. Finance does not settle a disagreement about the value of work.
Select the arrangement after the contract review
Invoice factoring
Factoring may add collection support where the construction debt is accepted. Confirm that the provider understands the contract and how queries are handled.
Invoice discounting
Discounting leaves collections with your team, subject to suitability. It does not remove the need for specialist review of conditional payment rights.
Selective invoice finance
Some providers assess selected projects or applications. Ask which documents they accept and whether future stages require fresh approval before planning additional commitments.
Compare factoring and invoice discounting before choosing who manages collections.
Illustration: use the eligible debt, not the application total
Suppose an application is £90,000 but only £72,000 is accepted for funding after assessment. At an illustrative 80% advance on that eligible amount, £57,600 is released—not £72,000.
The £14,400 balance of eligible debt is before fees. Excluded sums remain outside this calculation; it is not a quote.
Ask what specialist assessment costs
Compare service and funding charges with any contract-review costs, minimum fees and exit commitments. Request an illustration showing exclusions and reserves as well as the advance. Our cost guide explains why funding availability and fees must be assessed separately.
Bring the documents that explain entitlement
Prepare the signed subcontract, payment schedule, applications and current assessments or notices. List retentions, variations and disputes alongside debtor ageing and accounts. Include project expenditure forecasts and existing security when explaining the funding requirement.
Construction funding questions
Can an uncertified application be considered?
Some specialist providers consider such applications. Their decision depends on contract terms and assessment; acceptance should never be assumed from the application value alone.
Are retentions included in the advance?
They may be excluded or considered separately. Ask the provider to show exactly how retained amounts affect eligible debt and available cash.
What if the contractor disputes the valuation?
Disclose the dispute and supporting documents. The funding decision may change; obtaining finance does not resolve the underlying payment disagreement.
Can this pay mobilisation costs before work starts?
A receivables facility generally needs an acceptable payment entitlement. Pre-work labour and material spending should be discussed as a separate need.
Discuss your construction payment position
Tell Positive Funding what work has been completed, the current payment status and the expenditure you need to meet. We can explore whether a specialist provider discussion is appropriate.
Funding is subject to eligibility and provider agreement. Fees, guarantees and security requirements vary. Explore other business sectors.