Construction Finance UK 2026: AfP, Stage Payments and Retentions

Market Invoice is an independent UK invoice finance comparison site that ranks 87 UK invoice finance providers.

Construction businesses can't usually use standard invoice finance because they bill on Applications for Payment under JCT or NEC contracts rather than VAT invoices. Specialist UK construction finance providers such as Pulse Finance, Bibby, IGF and Ultimate Finance lend against AfPs, usually at a lower advance rate than on a VAT invoice because the certified sum can be cut, and some also fund against stage payment milestones, retentions and CIS subcontractor payroll. None of them publishes an AfP rate card: pricing is quoted per facility. Construction finance unlocks cash that's contractually earned but legally not collectable for 30 to 90 days, which is the single biggest cashflow problem for tier-2 and tier-3 contractors.

What this page covers

This page covers

construction finance UK: AfP finance, retentions, stage payments, subcontractor and CIS payroll finance for JCT and NEC contractors

Not covered here

General invoice finance education (see /guides/), individual provider reviews (see /providers/), full pricing breakdown (see /guides/costs/)

UK providers worth knowing

ProviderFee fromMin turnoverWhy it fits
Pulse FinanceNot published£1mConstruction named as a sector by Pulse itself
Bibby Financial ServicesNot publishedNot publishedFull construction proposition with credit control
Ultimate FinanceNot publishedNot publishedAfP and retentions release
IGF Invoice FinanceNot published£5mBusinesses over £5m turnover (asset-based lending)
Skipton Business FinanceNot published£100kConstruction and engineering bias

Detailed construction finance pages

Related finance

For sector context see our construction industry guide and the best invoice finance for construction picks, or invoice factoring for the underlying facility.

AP

Adam Parker

Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd

Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.

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Before you enquire

The questions most people ask at this point, answered before you fill anything in.

Will my customers know?

Only if the facility is disclosed. Confidential invoice discounting exists precisely so they are not told, and you keep running your own credit control. Which one suits depends on your size and ledger quality.

Confidential vs disclosed

Will I have to give a personal guarantee?

Often, though not always, and it is usually capped rather than unlimited. Invoice finance is secured on the ledger, so guarantees here tend to be narrower than on unsecured lending, and the wording varies more between funders than the headline rate does.

How security works

How quickly can it be in place?

A new facility is usually a matter of weeks rather than days, and the security paperwork sets the pace more than the credit decision does. Switching from an existing funder takes longer, because the outgoing lender has to release or rank its security.

What sets the timetable

What does it actually cost?

Two charges, not one: a service fee on turnover and a discount charge on the funds drawn, plus arrangement and sometimes exit fees. Comparing headline rates alone is how businesses end up on the wrong facility, because the total annual cost is what differs.

Full cost breakdown

Is my ledger even eligible?

The usual blockers are concentration in one customer, a history of credit notes, and billing that is staged, retained or applied for rather than invoiced on delivery. None is automatically fatal, but each reduces what a funder will advance.

Check your concentration

I already have a facility. Does that stop me?

No, but it changes the route. Either the incumbent releases its security so a new funder can take over, or the two rank alongside each other. If your current lender is exiting or has withdrawn the facility, the timetable is set by their notice period.

Existing or withdrawn facility

General information about how the market normally works, not advice, an offer or a quote. Market Invoice is a comparison and introducer service, not a lender.

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Construction Finance UK FAQ

Why doesn't standard invoice finance work for construction?

Construction main contractors bill the client via Applications for Payment (AfPs) under JCT or NEC standard form contracts, not VAT invoices. AfPs are subject to certification by a contract administrator, can be reduced or rejected, and are paid 30-60 days after certification.

Most invoice finance providers won't lend against AfPs because the value isn't crystallised at submission. Specialist construction finance providers handle this with adjusted advance rates and certification-aware monitoring.

What is Application for Payment (AfP) finance?

Specialist invoice finance for construction businesses billing on JCT or NEC contracts. The provider advances 60-75% of the AfP value at submission, with the balance paid (minus fee) when the main contractor pays the certified amount. Reduces the cash gap between AfP submission and certified payment from 30-60 days to 24 hours. Used heavily by groundworks, M&E, fit-out and specialist subcontractors.

Which UK lenders fund construction Applications for Payment?

Bibby Financial Services (full construction proposition), Ultimate Finance, IGF Invoice Finance, Skipton Business Finance, Aldermore and Pulse Finance, which names construction as one of its sectors. Ultimate Finance says it funds within 24 hours of an application for payment being raised.

None of these providers publishes AfP-specific advance rates or fees, so compare quotes on the same contract. Standard high street invoice finance providers (NatWest, Lloyds) usually decline construction or apply heavy haircuts.

Can I get finance against construction retentions?

Yes. Retentions release finance lets you draw cash today against the 5% (typically) of contract value held back by the main contractor for 12-24 months after practical completion. Few providers publish a retention product or its terms, and retentions are harder to fund than AfPs because release depends on completion and the defects period. Expect a lower advance than on a certified AfP and ask for a written quote.

Construction finance vs standard invoice finance UK?

Standard invoice finance: lends against VAT invoices, typical 80-90% advance, fees 0.5-2%, but rejects most construction billing. Construction finance: lends against AfPs and retentions, typical 60-75% advance, fees 1-3%, accepts JCT/NEC contracts, includes contract administration risk in the underwriting. Construction finance is more expensive per pound advanced but it's the only option for businesses on JCT or NEC contracts.

Do I need to be a main contractor to use construction finance?

No. The biggest users are tier-2 and tier-3 subcontractors (mechanical, electrical, plumbing, groundworks, fit-out, scaffolding, plant hire) waiting on payment from main contractors. Construction finance is often the only way for sub-contractors to fund payroll and material purchases between AfP submission and certified payment, especially on long projects with retention overhang.