Quick funding options for construction projects facing delays

• Cash flow challenge: Project delays are pushing back payment milestones, leaving my business short on funds to cover labour, materials, and overheads.

• Perfect for: Construction firms, contractors, and subcontractors who need short-term funding to bridge gaps caused by delays, weather disruptions, or client changes.

Novuna helps you secure quick funding to keep construction projects moving despite payment delays either through our award winning in-house service, or by comparing the market to find the best fit for your cash flow needs.

We compare providers who understand the construction sector, help you apply, and make sure you get the right deal for your needs.

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Why delays create cash flow problems in construction

Delays are common in construction due to weather, planning issues, client changes, or supply chain disruption. While the work might resume later, the financial impact is immediate:

• Payment milestones are postponed, leaving you without incoming cash
• Supplier accounts may fall overdue, risking strained relationships
• Staff and subcontractor wages still need to be paid
• Overheads such as equipment hire or site costs continue to accrue

In an industry where profit margins can be tight, a few weeks of delay can seriously impact cash flow and your ability to bid for new work.

Funding options to bridge project delays

Here are the most common quick funding solutions for construction businesses facing delays:

1. Invoice finance: Allows you to unlock cash tied up in unpaid invoices or certified applications for payment. Ideal if delays affect some but not all of your current projects.
2. Short-term business loans: A fixed sum of working capital that can be repaid over a few months to cover urgent costs. Flexible and quick to arrange, but repayment terms and interest rates should be reviewed carefully.
3. Merchant cash advance: If your business takes card payments (e.g. for smaller contracts or equipment hire), you can borrow against future sales and repay through a percentage of transactions.
4. Asset refinance: Unlock cash tied up in owned equipment or vehicles by refinancing them. This can be useful if delays are expected to last several months and you need a larger lump sum.

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Choosing the right quick funding solution

Before committing, consider:

• How soon you need the funds and how quickly the facility can be approved
• Whether the funding can be repaid before the delayed project completes
• The total cost of borrowing compared to the delay period
• Any industry-specific expertise the lender has

Working with a provider that understands construction payment structures can make the approval process faster and ensure you get terms that fit your situation.

Preventing cash flow issues from future delays

While funding is essential during a delay, prevention is better in the long run. Strategies include:

• Building a cash reserve from profitable projects
• Negotiating better payment terms with clients
• Securing framework agreements with multiple suppliers to avoid material shortages
• Using stage payments with shorter intervals to reduce reliance on final milestone payouts