Oakmead arranges £350,000 facility for construction business

London-based roofing specialist Precision Projects Ltd required capital to help with an increasing number of projects secured for this year following a period of rapid expansion at the company.

However, Precision had two significant bad debts and lengthening payment terms from its debtors, and banks were unreceptive to managing director Daniel Burbridge’s advances.

“It was difficult to see how I would have been able to make it through 2017 and I was starting to turn work away before I spoke to Oakmead Finance just because I couldn’t see a way to finance it,” Daniel said.

Oakmead Finance suggested that a more efficient way to fund growth was to unlock the value of completed work ahead of payments being made.

Richard Selvey-Clinton, director at Oakmead, advised, structured and arranged a confidential facility which was lent against both uncertified and certified applications.

Although only a handful of lenders would consider such a facility, borrowers could benefit from this type of lending due to more cash being made available than in overdrafts, and with less security being required.

Cash will now be generated through the stages of each project, helping to fund subsequent stages and ultimately more projects.

Credit insurance will also mitigate the impact of debtor failure and protracted dispute.

“Lack of adequate and suitable funding in the construction sector is a huge limiting factor for many businesses,” Richard added.

“Fortunately, we have been able to help by putting a package together which releases cash against Precision’s uncertified applications, thereby generating much-needed cash flow and helping them to fund their continued growth.”