Working capital for contractors - how to unlock funding for growth

• Cash flow challenge: Taking on bigger projects feels like a leap forward, but payment delays and long client terms are tying up funds I need to pay for materials, labour, and overheads.

• Perfect for: Contractors and construction firms eager to scale up without putting projects or cash flow at risk.

Novuna helps contractors unlock working capital precisely when they need it, whether from unpaid invoices, applications for payment, or stage-cert payments. That’s through our award winning in-house service or by comparing across the market to match you with the best fit funding.

We compare providers, help you apply, and make sure you get the right deal for your project timelines and needs.

Compare providers now Speak to an expert

Why working capital matters in construction

Construction uniquely struggles with cash flow because of common retention practices, milestone based invoicing, and holdbacks. UK data shows that a significant proportion of insolvencies in the sector are due to late payments.

Plus, retaining a large cash buffer may safeguard operations, but it limits your ability to reinvest in growth. Efficient working capital use can bridge that gap.

UK-tailored funding solutions contractors use

• Invoice finance aligned with stage payments: Releasing up to 95% of invoice value, including certified Applications for Payment (AFPs), keeps cash flowing through project stages.
• Factoring with removal of admin burden: This option advances cash immediately and handles client collection which is ideal when you’d rather focus on project delivery than chasing payments.
• Flexible business overdrafts or revolving credit: Keep a safety net for quieter months so you can maintain service standards without compromising quality.
• Invoice discounting with confidentiality: Maintain control of your sales ledger and collection process while still accessing up-front funding. This is common among firms concerned about client relationships.

Compare providers now Speak to an expert

Operational strategies to improve working capital

• Tighten credit control & collections: Aim to reduce Days Sales Outstanding (DSO) by following faster billing and regular payment reminders.
• Offer staged payments or retainage bonds: Instead of cash retentions, use bonds to secure performance and release funding faster.
• Negotiate with suppliers: Secure deferred payment terms aligned with your expected receipts to balance cash flow.

How Novuna supports your funding roadmap

• Specialist lender access: We work with providers familiar with construction’s milestones, retentions, and AFP cycles.
• Fast, tailored support: We help you apply and secure decisions often within 24–48 hours.
• Risk mitigation tools: Options like debtor protection or structures that fund up to 95% of invoice value ease growth planning.