Supply chain finance designed to support business growth across the construction industry.
Why use finance in the construction industry?
Businesses who rely on a large number of smaller subcontractors such as those in the construction, engineering and manufacturing sectors will reap benefits from supply chain finance.
Many organisations within these industries are faced with long cash conversion cycles and along with other benefits, supply chain finance will release working capital and liquidity that is tied up in the supply chain.
Supply chain finance allows buyers to enhance their own working capital position, whilst also supporting suppliers to improve their cash flow through the use of automated advanced payments.
Read more on improving business liquidity and boosting suppliers here.
What are the benefits?
Strengthen supply base
Driving stronger relationships with suppliers and contractors by accelerating payments will support mutual growth, offering both security and negotiating power.
Improve quick ratio
When organisations have many assets and a strong balance sheet, but negative cash flow, the banks may consider the business high risk and be reluctant to offer funding - our supply chain finance is more flexible than this.
Cash conversion cycle
Businesses with a long cash conversion cycle often find growth and innovation plans restricted by their cash position. Free up working capital from the supply chain to embrace opportunity.
Where your growth is limited by the illiquidity of your suppliers, supply chain finance allows for mutual growth.
Supply chain finance for construction businesses
Woodsford TradeBridge and Grant Thornton have created a short guide to supply chain finance.
This will explain how construction and engineering businesses can improve their access to working capital to:
Improve cashflow and working capital position.
Take advantage of new opportunities.
Achieve growth plans.
Secure and strengthen vital supply chain relationships.
Negotiate early payment terms with subcontractors and suppliers
vCards vs. supply chain finance
Both vCards and supply chain finance provide early payment options to suppliers, but each offers different benefits to businesses and subcontractors.
Find out about:
How supply chain finance and vCards actually work.
The pros and cons of vCards vs. supply chain finance.
Actionable strategies to strengthen your working capital position - and vital subcontractor relationships
Supporting subcontractor relationships
Paul McCulloch, Support Services Improvement Manager, explains how Osborne Ltd are able to strengthen vital subcontractor relationships without compromising their cash position.
Find out more about how Woodsford TradeBridge helps this client improve payment terms throughout their supply chain.
Prompt payment code
The government is putting pressure on the construction industry to actively improve payment terms with the Prompt Payment Code. This article looks in more detail at:
The prompt payment code, and the challenges this creates for the sector.
HMRC performance information - who is paying late.
Working capital tools and solutions for construction.
Controlling project cashflow
The Financial Director of a £200m turnover construction firm explains how a Supplier Early Payment programme from Woodsford TradeBridge has been invaluable in supporting their ambitious growth and development plans.
Find out how our client was able to strengthen relationships with subcontractors and secure cashflow needs on both sides of the equation.
'David and Goliath' vs 'the crocodile and the plover'
A number of highly successful businesses have changed the nature of their relationship with smaller suppliers – from toxic and unhealthy to something that helps them both to grow and to be successful.
Read our article to find out:
How the availability of working capital can shift the balance of power.
New ways to use a strong balance sheet to strengthen subcontractor relationships.
How the story of "the crocodile and the plover" can inspire you to create a new and more profitable subcontractor model for the business
Multiple contract construction firm
Underserved by their bank, a big contracting construction firm based in North London faced a working capital shortfall. With a Woodsford TradeBridge facility, they were able to adjust payment terms for subcontractors and negotiate improved terms for early payment.
Find out how a Woodsford TradeBridge facility helped this client to release capital to invest into growth opportunities.
Reverse charge VAT
Introduction of new rules around how construction businesses manage VAT will mean that the customer will be liable to account for VAT on purchases rather than the supplier.
Strong construction firms with a healthy balance sheet and working capital provision in place will create competitive advantage by managing these new rules to their advantage.
Read this article to find out:
The rationale behind the change.
How the system will work moving forwards.
The impact of the reverse charge on working capital.