Invoice Finance for Engineering Companies
Engineering companies - mechanical, civil, structural, process, and M&E - carry significant upfront costs on every project. Specialist materials, fabrication, testing, and skilled labour are all paid before the client sees a final invoice. With engineering clients typically on 45-60 day payment terms, a single £200,000 project ties up £120,000+ in working capital for months. Invoice finance advances 85-90% of each stage or completion invoice within 24 hours.
Engineering companies use invoice finance to advance 85% to 90% of each stage or completion invoice within 24 hours, freeing the working capital tied up by 45 to 60 day client payment terms. More detail + scope
This page covers
Invoice finance for UK engineering companies, upfront project costs, advance rates and client payment terms
Not covered here
Specific provider reviews (see /providers/), general invoice finance education (see /guides/), manufacturing (see /industries/manufacturing/)
Engineering-Specific Considerations
Stage payments and milestones. Many engineering contracts pay on completion of defined milestones rather than monthly. Factoring providers experienced with construction and engineering understand milestone billing and will advance against certified completion certificates - not just standard invoices.
Retentions. Engineering contracts often include 5-10% retention held for 6-12 months post-completion. The provider advances against the gross value minus retention. If retentions are a significant cash drag, some providers offer separate retention release facilities.
Variations and change orders. Engineering projects frequently involve scope changes. Providers need to see that variations are agreed and certified before they'll advance against them. Keep your variation documentation clean and timely.
Export engineering. If you provide engineering services or products internationally, providers like Bibby (80+ countries) and HSBC (62 countries) offer multi-currency invoice finance with overseas debtor credit checking.
Best Providers for Engineering
| Provider | Min Turnover | Milestone Billing? | Export? |
|---|---|---|---|
| Close Brothers | £750k | Yes | 60+ countries |
| Bibby | Not published | Yes | 80+ countries |
| Aldermore | £750k | Case by case | Limited |
| HSBC | £1m | Yes | Best international |
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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