Short answer: yes (and when it’s best)

Yes — construction businesses can obtain cashflow funding to pay for materials, labour and to unlock retentions. The right product depends on the problem you need to solve: short-term bridging while waiting for certified payments, invoice finance to accelerate billed stages, or retentions funding to access held retention sums early. UK Business Loans does not provide loans; we quickly match you with specialist lenders and brokers who understand construction cashflow and can deliver fast, no-obligation quotes. Complete a quick enquiry to start a Free Eligibility Check: Get Quote Now — Free Eligibility Check.

What is a cashflow loan?

“Cashflow loan” is an umbrella term for short-term finance designed to smooth working capital gaps. Unlike long-term term loans or fixed-asset finance, cashflow funding unlocks money tied up in day-to-day operations so you can keep trades moving and suppliers paid.

Common forms used in construction include:

• Invoice finance / factoring — release cash against invoices or certified stage payments.
• Retentions finance — convert retention amounts into immediate cash against evidence of certified work.
• Short-term unsecured or secured business loans and overdrafts.
• Contract / works finance or bridging — for large supplier orders or timing gaps between stages.

Why construction companies need cashflow finance

Construction projects naturally create timing mismatches between costs and receipts. Common pain points:

Materials

Large upfront supplier invoices for bulk orders or specialist materials can erode working capital before you invoice your client.

Labour & subcontractors

Payroll and subcontractor payments are predictable but often fall before certification or client payment — creating short-term pressure, especially on larger projects.

Retentions

Clients typically hold back 5–10% of contract value for a defect liability period (6–12 months). Retentions finance can monetise that held sum earlier.

Phased contracts & payment gaps

Staggered payment schedules mean cash is often tied up in ongoing works — if a payment is delayed the whole project can slow or stop.

Left unresolved, cashflow gaps can cause late supplier payments, suspended works or lost margins. The right short-term funding keeps projects on track.

Types of cashflow solutions available to construction companies

Below are the most common options, what they cover and when they suit construction businesses.

Invoice finance / factoring

What it covers: Releases a percentage of invoice value (or certified stage certificates) as soon as you submit them to the funder.

Pros: Fast access to cash, scales with sales/contracting pipeline. Cons: fees and administrative process; some clients prefer confidential arrangements.

Best for: firms that bill by invoice or milestone and need working capital to pay suppliers and labour while waiting for settlement.

Retentions finance

What it covers: Advances against retentions held by your clients so you get paid earlier than the formal release date.

Pros: Unlocks cash tied to completed work without waiting months. Cons: Eligibility depends on contract terms and client credit.

Best for: contractors with substantial retention balances delaying cashflow.

Short-term business loans (secured or unsecured)

What it covers: Lump sum for materials, payroll or urgent costs. Terms vary from months to a few years.

Pros: Simpler to arrange; fixed repayments. Cons: may require security or personal guarantees, and costs vary by credit profile.

Best for: predictable short-term needs where repayments fit expected incoming cash.

Bridging / contract / works finance

What it covers: Short-term bridging finance during an interim period — for example, between purchasing materials and stage payment.

Pros: Fast for urgent gaps; tailored to contract flows. Cons: higher fees for very short terms.

Supply chain / purchase order finance

What it covers: Pays suppliers directly, often based on approved purchase orders.

Pros: Helps secure supplier pricing and delivery with no immediate cash outlay. Cons: typically arranged for specific large orders.

Merchant cash advance / revenue-based

What it covers: Repayments tied to card or banked receipts — less common in general construction but possible for firms with consistent card income.

For a deeper overview of options, see our dedicated page on cashflow loans.

Typical lender eligibility & what lenders look for in construction

Lenders and specialist brokers evaluate construction finance differently from general business lending. Typical criteria include:

• Business structure: Limited companies and LLPs with clear trading history are preferred.
• Turnover & contract pipeline: Lenders want evidence of ongoing contracts and expected cashflows.
• Contract documentation: Purchase orders, JCT/NEC or sub-contract terms, valuation certificates and certified invoices.
• Accounts and management accounts: Last 12–24 months accounts or recent management accounts.
• Bank statements, aged debtor lists and retention schedules.
• Security and guarantees: some deals require property or director guarantees, depending on size and risk.

Typical loan sizes run from about £10,000 upwards. Terms may be short (30–365 days) for invoice/retentions funding, or 1–5 years for medium-term loans.

Quick checklist to prepare before enquiring:

• Company registration number and basic company details
• Recent management accounts and bank statements
• Copies of contracts, POs, and valuation certificates
• Aged debtor report and retention schedule
• Details of existing borrowing or securities

How UK Business Loans helps construction companies

We act as a fast introducer: you tell us what you need and we connect you with lenders and brokers who specialise in construction finance. We are not a lender and do not provide regulated financial advice — we introduce you to providers who will assess and quote.

Our simple process

1. Complete the short enquiry form (takes under 2 minutes) — Get Quote Now — Free Eligibility Check.
2. We match your business to selected lenders and brokers who understand construction cashflow.
3. Receive calls/emails with eligibility checks and quotes — often within hours.
4. Choose an offer and complete the application directly with the chosen lender/broker.

Our service is free to use and there’s no obligation to proceed. Enquiries are for matching only — they are not applications and won’t affect your credit score. Start your free eligibility check: Get Quote Now.

How to apply & what to prepare

Applying via our matching service is designed to be quick:

1. Complete the enquiry with basic business and contact details and the amount/purpose (materials, labour, retentions, other).
2. Have the following documents ready for lenders/brokers: company reg number, recent management accounts, bank statements (3–6 months), copies of contracts, invoices/certificates and a retention schedule.
3. Be transparent about credit history — it helps brokers identify suitable specialist lenders.

Timings: simple invoice or retentions finance can be arranged in 24–72 hours once paperwork is supplied. More complex facilities may take several days to a few weeks for due diligence. Ready to start? Start your free eligibility check.

Common concerns & compliance

Quick answers to frequent worries:

• Cost: costs vary by product and credit profile — lenders will disclose fees, interest rates and any arrangement costs in their quotes.
• Security / personal guarantees: some lenders may ask for security or guarantees, especially for higher-risk or larger deals.
• Client relationships: invoice factoring can be confidential or disclosed — discuss with your broker how client communications are handled.
• Credit checks: submitting an enquiry does not affect your credit score. Lenders may perform credit checks later if you apply.

Important: UK Business Loans is an introducer. We do not lend or provide regulated financial advice. Any lending decision, terms, affordability and credit checks are carried out by the third-party lender or broker you choose. Read lender terms carefully and consider independent advice for large or complex borrowing.

Real-life examples

Case study — retentions release: A civils contractor had £60k trapped in retentions across three contracts. Using retentions finance arranged by a specialist broker introduced via our service, the firm accessed £52k net, met its payroll and avoided late supplier penalties. Result: project continuity and preserved margins.

Case study — invoice acceleration: A regional contractor used invoice finance to accelerate £150k of certified invoices. Immediate liquidity allowed bulk material purchases at discount, reducing overall material costs and improving project margins.

Frequently asked questions

Can you fund retentions held on construction contracts?

Yes — many lenders offer retentions finance that converts held retentions into cash. Eligibility depends on contract terms, client creditworthiness and retention release conditions.

How quickly can I get cash?

Speed varies. Invoice or retentions funding can sometimes be arranged within 24–72 hours after documentation; loans or bridging may take days to weeks depending on underwriting.

Will applying via UK Business Loans affect my credit score?

No — submitting an enquiry with us does not affect your credit score. Lenders may perform credit checks later if you proceed with an application.

Is UK Business Loans an FCA-regulated lender?

No — we are an introducer. Any lender or broker you deal with will advise on regulation and carry out necessary checks.

What fees can I expect?

Fees depend on product: invoice and retentions finance charge funding fees and interest; bridging loans typically have higher interest and arrangement fees. Brokers and lenders will provide full cost schedules before you commit.

Will lenders ask for personal guarantees?

Some lenders require personal guarantees, particularly for smaller firms or where limited security exists. A broker can often source more suitable options to avoid or limit PGs where possible.

If you have a specific situation, provide details and we’ll match you to the best specialist: Free Eligibility Check.

Final CTA & next steps

Need cash now for materials, payroll or to unlock retentions? Start the process — it’s free, quick and no obligation. Complete our short form and we’ll match you with lenders and brokers who specialise in construction finance: Get Quote Now — Free Eligibility Check.

UK Business Loans acts as an introducer. We do not lend or provide regulated financial advice. Any credit agreement will be between you and the chosen lender; terms, checks and affordability assessments apply.

Internal links & resources

• Invoice finance for construction
• Retentions finance
• Asset finance
• How it works
• Start your enquiry