For contractors, subcontractors and builders
Construction Finance
Construction finance covers the funding builders, contractors and trades use to buy plant, cover materials and labour before stage payments arrive, and bridge the gap left by retentions and CIS deductions.
Funding Plus works with lenders that understand construction contracts, from sole-trader tradespeople to main contractors.
- Plant and machinery finance
- Funding for materials and payroll
- Lenders that understand retentions and CIS
Reviewed by the Funding Plus team · Last updated October 2026
Step 1 of 3 · Construction finance
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Cash Flow Challenges in Construction
Construction businesses often pay for labour and materials weeks or months before they're paid, and some money is held back long after a job finishes.
Stage payments
You fund each stage of work before the valuation is certified and paid.
Retentions
A share of each payment, often 3% to 5%, is held back until the defects period ends.
CIS deductions
Subcontractors have tax deducted at source, which reduces cash coming in until it's reclaimed.
Expensive plant
Excavators, scaffolding and vehicles tie up large sums if bought outright.
The Best Funding Options for Construction Businesses
Asset finance
Spread the cost of plant and machinery, new or used, with the equipment as security.
Vehicle finance
Vans, tippers and site vehicles on hire purchase or contract hire.
Business line of credit
Draw funds for materials and wages between valuations, and repay when they're paid.
VAT and tax loans
Spread large VAT bills, which can be lumpy around big contract payments.
Invoice finance
Some specialist lenders fund certified applications for payment. Not all construction invoices qualify.
Example
A groundworks contractor buying an excavator
A groundworks firm wins a 12-month contract that needs a second excavator costing £85,000. Rather than use its working capital, it finances the machine over four years on hire purchase with a 10% deposit, keeping cash free for wages and materials during the first stages of the job.
Illustrative example, not a real customer or a quote.
What Lenders Look For
- A pipeline of contracts and repeat clients
- How you manage retentions and payment terms
- Your CIS status and tax record
- Profit margins on recent jobs
- The age and resale value of any plant being financed
Construction Finance FAQs
Can subcontractors get construction finance?
Yes. Many lenders fund subcontractors, including sole traders, especially for equipment and vehicles.
Can I borrow against retentions?
A few specialist lenders will. More often, a line of credit or loan covers the gap until retentions are released.
Is invoice finance available in construction?
Sometimes. Contract-based invoices and applications for payment are harder to fund, so specialist lenders are needed.
Can a new construction business get finance?
Often for equipment and vehicles, as the asset secures the deal. Unsecured loans usually need more trading history.
Find funding for your construction business
Tell us what you need and we'll match you with lenders that understand your sector.