• 28 Nov

    The Reasons Why Only 2 Percent Use Construction Finance

    As part of our recent #constructionfinance survey, we asked 100 construction businesses if they needed to raise finance over the next 12 months - 65% said they did. However, we also asked if they used invoice finance or finance against applications for payment (hereafter called construction finance). Only 2% used construction finance so we went on to ask those that didn't use construction finance why not.

    These are the reasons they gave for not using construction finance:

     

      • 42% had never heard of it

     

      • 22% said they were cash-rich or didn't need finance

     

      • 12% said it was too expensive

     

      • 9% said they used an overdraft or bank loan instead

     

      • 6% said they didn't think they would be suited to construction finance

     

      • 4% said they had been turned down

     

      • 3% said they had never considered it as an option

     


    So the results suggest that the biggest issue for financing this sector is a lack of knowledge that construction finance is even available with 42% having never heard of it and a further 3% having never considered it as an option. There appears to be a great deal of scope to raise awareness of the availability of this type of finance within the construction sector specifically.

    By Glenn Blackman

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