It is interesting to see certain invoice finance providers now using specialist departments to deal with businesses that operate in the construction sector.

In part this is really good news for businesses that are definitely a part of the construction sector. If they are very much entrenched in contractual debt, applications for payment and stage payments then a lot of businesses would not have a suitable cash flow solution. Now they at least have an option albeit an expensive one with low prepayments. That said it is probably structured and priced according to risk although part of me feels in some instances lenders are taking advantage where they feel they are the only lender willing to assist.

Bibby Financial Services are one such lender with a specialised Construction Factoring arm. Bibby are a great solutions driven lender that we deal with a lot. Their construction factoring arm can offer solutions to businesses where other lenders are not willing to lend money so fair play to them. However, they also insist on putting a lot of businesses throuigh their construction that perhaps do not need to be there. On the fringes of the construction industry are a lot of businesses that more traditional lenders are happy to assist with sensible prepayment levels and palatable pricing. Unfortunately a lot of these businesses are lost to the Bibby group because of their insistance on placing these businesses in their construction team.

In these instances their sometimes arrogant stance that ‘nobody else can do the deal’ is not true and as such their offering simply looks over priced and risk averse.