Won a Big Contract But Can't Fund It?
This is one of the most frustrating positions in business. You've landed the work. The customer's ready. But you need to spend £20,000 on materials, or hire 5 contractors, or buy stock - and the payment won't arrive for 60 days. Turning it down feels insane, but funding it from your own pocket might break you.
This is a solvable problem. Thousands of UK businesses face it every month, and there are funding mechanisms specifically designed for it. The right solution depends on what the contract looks like.
Scenario 1: You'll invoice as you deliver
Example: You're a recruitment agency placing 10 contractors at £500/day each. You need to fund their payroll from week one, but the client pays monthly in arrears.
Solution: Invoice finance. As soon as you submit your first timesheet or invoice, the provider advances 85-95% within 24 hours. You use that to cover next week's payroll. Each week's timesheets generate more funding. The facility self-funds from the second cycle onwards.
Cost: Approximately 1-2% of invoice value. On £50,000/month of invoicing, that's £500-£1,000/month.
Scenario 2: You need to buy materials before you can start
Example: You're a manufacturer who's won a £100,000 order. You need £40,000 of raw materials upfront, but the customer pays 60 days after delivery.
Solution: Purchase order finance + invoice finance. PO finance advances funds against the confirmed purchase order BEFORE you start work, covering your material costs. Once you deliver and invoice, invoice finance takes over and repays the PO facility.
Cost: PO finance is more expensive (2-6% of order value) because the risk is higher - work hasn't been completed yet. But combined with invoice factoring on the back end, the blended cost is manageable against a profitable contract.
Scenario 3: It's a single large project with stage payments
Example: You're a construction subcontractor on a 6-month fit-out. The main contractor pays on monthly valuations with 5% retention.
Solution: Construction factoring. Specialist providers advance against certified applications for payment, understanding retentions, stage payments, and the Construction Act. You get 75-90% of each monthly valuation within days, not the 49-day average for the sector.
Cost: 1-3% of invoice value. Worth it when the alternative is not being able to pay your own subcontractors or material suppliers.
What Providers Will Want to See
- 1.The contract or purchase order (confirms the work exists)
- 2.The customer's creditworthiness (they'll run a credit check)
- 3.Your margin on the contract (they want to see it's profitable)
- 4.Your ability to deliver (track record, team, capability)
- 5.6 months of bank statements (to verify existing cash flow)
How Fast Can This Happen?
If you already have an invoice finance facility, funding a new contract is immediate - you just submit the first invoice. If you need to set up a new facility from scratch, most providers can complete setup in 3-10 working days. Some offer fast-track in 48 hours for urgent situations. The key is applying BEFORE you're desperate - providers are more flexible when you're planning ahead rather than fire-fighting.
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.
Last reviewed: 27 May 2026