Supporting local authority contracts
Despite the government pledging to tackle late payment, local authorities can be notoriously bad at paying on time. So, when taking on large contracts with them it can be beneficial to have flexible funding in place to ensure your cash flow remains healthy at all times.
Our client, a mechanical and electrical engineering company, had won a series of new contracts with local authorities. But, with a high outlay in staff and materials required to fulfil the contract, the project was set to stretch cash flow.
Historically the business had relied on their business overdraft to boost their cash flow when needed but the inflexible nature of an overdraft meant that, with these new contracts coming in fast, the business needed additional funding in order to support their growth.
Keen to get a new facility in place to be able to capitalise on these new opportunities, we quickly got to work in introducing the client to a selection of funders who could offer competitive solutions.
After assessing the three most suitable options, the client opted for a confidential construction finance facility with the funder they felt most comfortable with due to their speedy response, knowledge and understanding of the business and its needs.
Now, with their new funding facility in place, the business is able to release funding from applications for payment or stage invoices to bridge the cash flow gap between paying suppliers and getting paid.
This has provided the funding required to support the new local authority contracts and allow the business to continue going from strength to strength.
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