*Sponsored content from Bibby Financial Services Limited.
Construction SMEs: a unique set of challenges
The challenges facing construction SMEs have been well documented. Rising costs, persistent inflation, late payments, long project cycles and supply chain disruptions have created a perfect storm, leaving firms particularly exposed to cashflow pressures.
Our September 2025 research of 1,000 UK SMEs highlights the impact, revealing construction businesses are less confident about their trading prospects than other sectors.
- 63% of the 200+ construction firms we surveyed expect sales to increase in the next six months, compared to 72% across all industries.
- Only 21% believe themselves to currently be in ‘growth mode’.
Despite being faced with difficult trading conditions, construction firms can still achieve growth. Being able to manage cashflow effectively is a key driver, and securing the right funding support can enable this.
Maintaining a healthy cashflow: how specialist Construction Finance can help
Staged and partial payments, plus long payment terms, can make finance harder to secure. Traditional lenders are often unable to adequately support the sector, and there are fewer specialist lenders in this space. But, gone are the days when banks need to be the first and only port of call for construction businesses looking for external finance.
Construction Invoice Finance gives businesses access to funding while waiting for their application for payments or outstanding invoices to be paid. By bridging the gap between completing a job and getting paid, it gives businesses access to cash that has already been earned on an ongoing basis. This helps them manage cashflow more effectively, so they have the working capital to complete existing contracts as well as the confidence to tender for new projects.
Recently, we partnered with a demolition and groundwork contractor. Despite having a strong pipeline of projects, their bank declined support—simply because they operated in what was deemed the “wrong” sector.
This is a scenario we see all too often: businesses with solid fundamentals being held back by rigid lending criteria. Our solution was different. By providing a facility that unlocked funds tied up in outstanding, uncertified applications, we gave the contractor immediate access to the capital they needed.
The impact was significant. With improved cash flow, the business could take on new projects confidently, knowing that as their workload grows, our funding grows alongside them. This flexibility not only supports day-to-day operations but also empowers long-term scalability—something traditional lenders often overlook.
How does Construction Finance work?
- Upload payment applications - once you complete a phase of work, upload uncertified and certified applications for payment and invoices to our secure online portal.
- Access funds fast - we fund a pre-agreed percentage of the application for payment and invoices within 24 hours.
- We collect customer payments – acting as your credit control department, we collect customer payments on your behalf. We can do this confidentially, so your customers would never know you’re using our facility.
- Payment of balance - once your customer pays us, we deduct what’s owed (including any pre-agreed fees) and release the balance.
Playing our part in supporting the construction sector
At Bibby Financial Services, we recognise the vital role construction SMEs play in the UK economy and the unique pressures they face. That’s why we’re committed to supporting an increasing number of FMB members across the UK.
We’ve been providing funding solutions to SMEs for over 40 years and were the first independent funder to offer finance specifically for the construction sector nearly two decades ago. We’ve since funded thousands of construction businesses and have experience in over 80 trades.
We talk to many firms who are held back by their current funding limit or simply don’t know what options exist. To support growth, it’s vital that firms can access funding that is tailored to the sector as well as the needs of their business.
Find out how tailored construction Finance can help you maintain cashflow and unlock the growth potential of your business.
Authors
Jeremy Knowles
Bibby Financial Services (BFS) have been supporting SMEs for over 40 years and were the first independent funder to offer specialist finance for the construction sector. Jeremy has over three decades of experience in banking and commercial finance, and has spent the last nine years specialising in funding construction businesses.
