Working Capital for an Electrical Contractor
Our client is an electrical contractor that works for home builders.
- Turnover is £700,000 + VAT
- They are submitting applications for payment
- Stage billing is applicable against measured works on a monthly basis
- The work is contractual and the contracts contain applications for payment
Due to the nature of the work described above the banks were unable to support the business with either an overdraft facility or an invoice finance facility.
The business had sourced an independent invoice finance provider (Lender A) that could support them but considered it to be expensive. They approached Funding Solutions after a recommendation from a business contact.
We sourced a facility from Lender B that compared as follows:
Based on a turnover of £650k + VAT and average borrowing of £50k costs would be as follows:
Our facility provided:
- A 51% cost reduction
- Generates 20% more cash
- Provides a 53% increase in the funding limit.
At Funding Solutions, we specialise in helping construction contractors raising working capital. As you can see from the above it is imperative you get expert advice to ensure you are getting the best possible facility.