SME Business Loan Companies: The Best Lenders For Construction Firms

The construction industry contributes around £117 billion to the UK economy each year, making it one of the largest single sectors. As well as large corporate construction companies building vast developments there are also thousands of smaller construction firms in operation, many of them facing the same challenges as all other SMEs across the country. These include cash flow issues, payroll, delayed invoices and finding funding to drive growth. Which is where a SME business loan company can enter the picture, offering tailored solutions for construction companies looking to thrive.

Why SME Business Loans In Construction Matter

The construction industry operates in a different way to many other sectors. It is generally a project-based revenue system, meaning that many businesses experience cash flow fluctuations. This is exacerbated by delayed client payments, rising material costs and labour expenses. SME business loan companies are therefore ideally placed to provide the necessary capital which allows construction firms to invest in new projects and expand. With around two in every five UK construction businesses seeking external finance in 2023, it’s clear that the demand is there.

The Key Features Of SME Business Loans For Construction

There are multiple benefits for construction firms looking to take out an SME business loan. These include:

• Flexible repayment: Repayment plans can be tailored to individual business needs and to match the cash flow cycle of the business.
• Fast access: Traditional lending options can often take too long to be of any real use to construction firms, who often need much faster access to funding. SME business loans can be available within 24 to 48 hours.
• Secured or unsecured: Construction firms can opt to secure loans against assets or choose an unsecured option if they need faster approval.

Factors To Consider For SME Business Loans

Of course, as with any type of funding, there are a number of key factors construction firms need to consider. These include the interest rates and fees attached to the loan, which generally ranged between 6 and 12% in 2023. There are also the repayment terms. As mentioned these tend to be more flexible and avoid saddling business with long term debt structures but construction firms need to be sure they have the cash flow cycles to make repayments when required.

Firms also need to make sure they meet the eligibility criteria, with special reference to their credit scores and borrowing history. Businesses need to make sure they are suitable to approve funding to avoid wasting time in the application process.

However, once all criteria are met and construction companies are satisfied they can repay the loan, this type of fast SME business loan is a great option for many smaller firms. You can find out more about fast funding for small businesses by getting in touch with our team here at Century Business Finance.

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