Keeping a £4 million construction business moving
A successful UK construction firm secured £50,000 through MCL Finance.
The funding helped support an ongoing contract.
It also kept daily operations running while the business waited for its next major payment.
The firm had approximately £4 million in annual turnover. It worked on high-value construction contracts with substantial payments arriving during the month or quarter.
That sounds positive.
However, large contract payments do not always arrive when costs fall due.
The business still needed to make regular payments throughout each contract period, including:
- Materials
- Equipment
- Machinery rental
- Subcontractor invoices
- Fuel bills
- Other project-related costs
The firm already used a line of credit to manage cash flow.
However, rapid growth and ongoing contract demands created additional pressure. The directors needed extra working capital to bridge the gap between outgoing payments and incoming contract income.
The construction cash flow challenge
Construction businesses often experience uneven cash flow.
A project may generate a large payment at a specific milestone. That income could arrive later in the month or quarter.
In the meantime, the contractor must continue spending.
Materials may need ordering before work starts. Plant may need hiring for several weeks. Subcontractors may require regular payments. Fuel and site costs continue regardless of the payment schedule.
This creates a timing issue.
The business may be profitable and have strong future income. Yet its available cash can become strained temporarily.
That was the challenge for this construction firm.
The company had grown rapidly. Its high-value contracts supported strong turnover and future prospects. However, this growth also increased the amount of working capital needed between payments.
Some traditional lenders found the company’s circumstances difficult to assess.
The volatile nature of construction can make some lenders cautious. Rapid growth can also create unusual cash flow patterns. This can lead to rejected applications, even where the underlying business is strong.
The directors had previously been rejected by other lenders.
They needed a lender that could assess the wider position. That included the company’s contract activity, turnover, directors and recent trading performance.
The £50,000 MCL Finance solution
SME Finance Hub reviewed the application through its specialist lender panel.
The requirement was clear.
The business needed £50,000 to support an ongoing contract and maintain normal operations until expected income arrived.
MCL Finance offered a suitable loan structure:
- Funding amount: £50,000
- Loan term: 48 weeks
- Repayment frequency: Weekly payments
- Security: No assets used as security
- Debenture: None
- Personal guarantee: Provided by both directors
- Arrangement fee: None
- Interest: One fixed monthly interest rate
- Early settlement: Available at any stage, with savings on remaining interest
The loan complemented the company’s existing line of credit.
It did not replace the facility. Instead, it provided additional working capital for a specific contract requirement.
This gave the directors more room to manage regular costs while waiting for contract income to arrive.
An alternative funding structure was also available
MCL Finance also offered an alternative option.
This was:
- Funding amount: £35,000
- Loan term: 12 months
- Repayment frequency: Monthly payments
The directors could therefore consider different funding amounts and repayment schedules.
They proceeded with the £50,000 loan over 48 weeks. The weekly repayment structure suited the business’s cash flow planning and immediate working capital needs.
Fast approval with straightforward documentation
The approval was offered after reviewing the basics.
The lender required:
- Directors’ details
- Six months of business bank statements
- The latest full accounts
This helped keep the process simple.
There was no request to secure the loan against machinery, vehicles, property or other business assets. No debenture was registered as part of the arrangement.
The two directors were a husband and wife.
Both provided a personal guarantee. They were also homeowners, which helped their personal guarantee position during the lender’s assessment.
A personal guarantee is a commitment from a director to support repayment if the company cannot meet its obligations. It is important to understand the risks before signing one.
Read our personal guarantee guide for more information.
Funds available the next day
Speed was important for this application.
The business needed to keep its contract moving. Delaying material purchases, equipment hire or subcontractor payments could have affected project progress.
After the directors signed the documents, funds were available the next day.
This allowed the company to access the working capital it needed without waiting through a lengthy traditional lending process.
Fast funding can be particularly valuable in construction. A delay on one payment can affect several parts of a project.
It can impact:
- Supplier relationships
- Subcontractor availability
- Machinery hire
- Site progress
- Contract deadlines
- Future tender opportunities
The funding helped the directors manage these pressures with greater confidence.
How the funding supported the contract
The £50,000 was used to support the ongoing contract.
The business could continue meeting smaller, regular costs while waiting for a larger income payment.
This included the types of costs commonly associated with construction work:
- Purchasing materials for the next stage
- Hiring machinery and equipment
- Paying subcontractors on time
- Covering fuel and transport expenses
- Maintaining progress across the contract
The loan provided a bridge between the timing of expenditure and the timing of income.
That distinction matters.
The business was not looking to fund an unknown venture. It had high-value contracts and an established trading history.
It needed short-term business funding to manage the cash flow cycle around existing work.
This is a common reason construction firms explore short-term business loans.
Why the application succeeded after previous rejections
Previous lender decisions did not reflect the full potential of the business.
Some lenders viewed the construction sector as too volatile. Others may have found the company’s rapid growth difficult to fit within their standard lending criteria.
Specialist lenders can take a broader view.
They may consider:
- The company’s turnover
- Trading history
- Recent bank statements
- Contract activity
- Directors’ experience
- Homeownership
- Existing credit facilities
- The purpose of the funding
This does not guarantee approval.
Every application remains subject to lender criteria and affordability checks. However, using a specialist lender panel can provide access to more suitable funding routes.
A single bank may decline an application.
That does not necessarily mean funding is unavailable elsewhere.
SME Finance Hub helps UK businesses explore options without applying separately to multiple lenders. There are no upfront fees and no obligation to proceed.
A funding structure suited to the business
The final loan offered several useful features.
No arrangement fee
The lender did not charge an arrangement fee for the £50,000 facility.
This helped keep the cost structure clear from the outset.
Fixed interest rate
The loan used one fixed monthly interest rate.
This gave the directors a consistent basis for planning repayments.
Weekly repayments
The 48-week term used weekly payments.
For a business managing regular project costs, weekly repayments can help spread the outgoing more evenly.
The right repayment frequency depends on the company’s income cycle and affordability. Some businesses prefer weekly repayments. Others may benefit from monthly payments.
Early settlement flexibility
The loan could be settled early at any stage.
The business could also save on the remaining interest when settling early.
This gave the directors flexibility if the expected contract income arrived sooner than planned.
What other construction businesses can learn
This case highlights several practical points for contractors and subcontractors.
1. Strong turnover does not remove cash flow pressure
A business can generate approximately £4 million in annual turnover and still experience temporary cash strain.
Turnover does not always arrive at the same time as costs.
Cash flow planning remains important, even for established contractors.
2. Existing finance may not cover every need
The client already used a line of credit.
That facility helped manage cash flow. However, the ongoing contract created a further requirement.
A separate loan can sometimes provide funding for a defined project or working capital need.
3. Rapid growth can change a lender’s view
Growth is positive, but it can also make financial statements look less predictable.
Costs may rise before income catches up. Traditional lenders may find that pattern difficult to assess.
Specialist funding can be worth exploring when the business fundamentals remain strong.
4. Unsecured funding can preserve business assets
This loan was not secured against assets.
There was also no debenture.
Businesses exploring similar options can review unsecured business loans alongside secured alternatives. The available terms will depend on the business, lender and application.
5. Prepare the essential documents
This application progressed using basic information:
- Directors’ details
- Six months of bank statements
- Latest full accounts
Having these documents ready can support faster decisions.
Could construction finance help your business?
SME Finance Hub helps UK limited companies explore business funding from £5,000 to £500,000+.
Funding may be available for:
- Contract-related working capital
- Materials
- Plant and equipment
- Subcontractor payments
- Business growth
- Tax and VAT bills
- Cash flow gaps
You can also explore construction business loans, business growth loans and asset funding.
To meet the usual baseline criteria, your business should be:
- A UK registered limited company
- Trading for at least six months
- Generating at least £10,000 in monthly turnover
- Supported by at least one UK resident director
Applying through SME Finance Hub involves no upfront fees or obligation. We offer fast decisions through a specialist lender panel, with possible same-day or next-day funding for qualifying businesses.
We are the consumer-facing brand of Capital Business Loans Limited, an FCA-authorised UK business finance broker.
Speak to SME Finance Hub
If your construction business is waiting for a large contract payment, funding could help maintain progress in the meantime.
Apply online in a few minutes, check your eligibility or speak with an expert.
- Funding from £5,000 to £500,000+
- No upfront fees to apply
- No obligation
- Fast decisions
- Specialist lender panel
- FCA-authorised broker
- 5/5 Google rating
Apply for construction funding or call 01244 906505.
You can also email hello@smefinancehub.co.uk.
Brokers involved: Andy Yates. Published by Andy Yates, Director.
This client success story has been anonymised to protect client confidentiality. All funding is subject to lender approval, affordability assessment and individual circumstances. Terms, rates and repayment structures vary by lender.