The UK construction industry is extremely important as a contributor to the overall economy. It is among the largest sectors and contributes around £90 billion a year to the economy, and is responsible for employing more than two million workers.
Construction companies of all sizes are involved in the construction of retail parks, new homes, industrial premises and leisure facilities. This means there is a constant requirement for financial resources for these companies in order to develop and complete such projects. While banks have been somewhat reluctant to lend in recent years, other financial service providers such as www.ultimatefinance.co.uk have moved in to fill this gap, offering dedicated construction finance to the construction sector.
Challenges for the construction industry
The construction sector is traditionally associated with high operational costs related to raw materials and heavy plant and machinery required for construction projects. Economies of scale – through bulk ordering – make a difference, but at the same time produce stress on essential cashflow. The cost of highly-skilled labour required for such projects also places much pressure on construction companies in terms of operational overheads.
Globalization has already had a significant impact on the UK construction sector. The emergence of green construction practices and alternative materials as part of the drive towards sustainable construction has been on the rise and is likely to continue in the future. In addition, technological advances and emerging forces such as Brazil and China are also bringing changes to the traditional methods of doing business within the construction sector. Construction finance helps provide the essential financial resources to ensure the smooth completion of both national and international construction projects.
Dedicated lenders can provide construction finance for a range of purposes: project finance, material purchase, investment in machinery and plant, skills training, exportation, as well as helping with liquidity of cashflow.
Emergency funding can be put in place to meet short-term cashflow shortages, often made available within 24 hours if the company is sound and has a good track record, without requiring extensive background checks and with much less paperwork than a conventional bank loan would require.
Long-term financing solutions
Asset based finance can be utilized for longer term needs. This is cash which is obtained based on the value of existing assets within the construction firm, and is often a brokered service to enable access to various lenders willing to inject cash into the construction sector.
Construction finance is provided by dedicated lenders willing to work hand in hand with construction companies and is often available as a tailor made financial solution based on the immediate needs of the construction firm and its current circumstances.