UK construction businesses ‘face an average wait of 69 days for invoices to be paid’

27 March, 2018

Funding Options states its analysis of 13,213, UK construction businesses shows that they face an average wait of 69 days for their invoices to be paid in the last year, which is a sharp 8% increase from the 64 days wait in 2014/15.

A single late payment can be an issue even for successful firms, which can be caught out if a major client delays a payment significantly. If that late payment coincides with a major bill coming in, such as a tax, VAT or rent payment, the consequences can be severe.

Funding Options adds that delays in paying one lead construction contractor could put jobs at risk all along the supply chain. The construction sector has a long supply chain which includes many small and medium sized enterprises.

Funding Options says slow payment of bills is a major reason why the construction sector has such a high number of insolvencies. 2557 construction firms entered insolvency in the year ending 2016.

Subdued appetite for risk

Conrad Ford, CEO of Funding Options, commented: “The aftermath of the Brexit vote suggests a fragile confidence and a subdued appetite for risk, especially in the commercial building sector. Long supply chains in industries like construction mean that the ripple effect of delays is likely to affect many other businesses further down, with SMEs hit the hardest. In an industry with high overheads in terms of materials and labour costs, this can be difficult to deal with.”

Ford continued: “There is a wide range of choices out there for small businesses seeking funding – invoice finance, asset finance, crowdfunding and peer-to-peer lending can all provide the liquidity businesses need. Unfortunately, small businesses leaders often don’t know which sort of finance is the best fit for a particular need, or who is out there to provide it. At Funding Options, we’re able to scour our extensive panel of lenders across the spectrum to put together a funding package for a business, no matter how complex, urgent or challenging its situation.”

www.fundingoptions.com