Finance to fuel your Construction business

Finance options for your construction business

Construction businesses have unique and varied reasons for needing external funding, and not all finance options will be right for every business.

At Aurora Capital, we understand your business’s needs and specialise in finding the most appropriate funding solutions for construction professionals.

We offer a range of business financing options with varying eligibility criteria, funding amounts, and usage options. Whether you need to address a short-term cash flow issue or buy new equipment, we have a solution that can help.

Unsecured business loans

Unsecured business loans are a way for your construction company to borrow a lump sum without requiring collateral. Unsecured loans are ideal if your construction business lacks valuable assets to offer as security or if you don’t want to use them as collateral.

They are a versatile borrowing option, as they can be used for any business-related purpose. The loan amounts usually range from £1,000 to £500,000 and can be repaid over a maximum period of six years.

Whether you are looking to inject a lump sum into the business for an upcoming contract, purchase new machinery and equipment or simply just improve cash flow to purchase materials or pay sub-contractors, unsecured business loans are a perfect fit for construction companies throughout the UK.

Revolving credit facility

Revolving credit facilities are flexible credit lines that function like business overdrafts. They could be the answer if your construction business needs a financial cushion to cover unexpected costs or cash flow problems.

Revolving credit facilities typically offer loan amounts between £10,000 and £2 million, with a borrowing term of up to two years. As funds are drawn, the available credit reduces, but once repayments are made, the credit limit is restored, allowing businesses to borrow, repay, and reuse funds as needed.

This makes them an ideal option for construction companies. We have worked with businesses to help them with:

1. Paying sub-contractors
2. Purchasing materials
3. Paying bills/suppliers
4. Paying HMRC

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Growth Guarantee Loan

The Growth Guarantee Scheme (GGS) is a government-backed finance scheme designed to help businesses access finance they can use to invest and grow.

This type of borrowing is ideal if your construction business has encountered financial setbacks and needs more money to move forward.

The loan amounts usually range from £25,000 to £2 million and can be borrowed over a maximum period of six years.

Asset finance

Asset finance can allow your construction company to acquire the assets it needs to operate, like machinery, vehicles, and other equipment, without impacting cash flow.

You can also use asset finance to refinance assets your business already owns to release cash into the company. However, there are eligibility criteria regarding the age and condition of equipment that can be refinanced.

How construction finance can help your business

Securing finance could be essential to taking your construction business to the next level or overcoming unexpected challenges.

There are a range of scenarios in which construction finance could help support and grow your business, including:

Purchasing new equipment

Construction businesses often use finance to purchase equipment, whether new machinery or replacement equipment.

Hire purchase (through asset finance) is a common option that construction businesses consider when purchasing equipment.

Asset finance is an ideal option for businesses looking to expand. An asset finance agreement allows your company to purchase new assets if it doesn’t have the funds immediately available to do so.

This way, your company can purchase the assets required to ensure future growth, like a new bulldozer or excavator.

Boost cash flow

Construction projects often involve significant upfront costs, from purchasing materials to paying subcontractors, long before client payments are received.

This can create cash flow challenges, especially when working on multiple projects at once. A revolving credit facility can help bridge this gap by providing flexible access to funds whenever needed.

Rather than waiting for payments to come in, you can access funds to cover wages, purchase materials, and manage operational costs. Then, you can repay and reuse the credit as project revenue comes in.

This ensures steady cash flow, reduces reliance on overdrafts or expensive short-term borrowing, and gives your construction business the financial flexibility to take on larger projects.

Growing your team

Expanding your workforce to take on larger projects is one of the most valuable ways your construction businesses can use finance.

With additional skilled tradespeople, site managers, or project coordinators, your business could increase capacity, take on more contracts, and complete projects more efficiently.

This could also include hiring specialists for health and safety compliance, project planning, or equipment operation to improve efficiency and reduce delays.

Investing in a skilled workforce can strengthen your construction business, enhance project delivery, and position you for long-term growth.

Choosing the right option

It’s important to give careful consideration to the type of financing option that best suits your business needs, taking into account things like:

• The purpose of the loan
• The loan amount you need and repayment terms
• Whether you want to use assets as collateral

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If you’re unsure what type of construction finance is most suitable for buying equipment, speak to one of our team members today.