Established UK construction firms can fund growth through regional and skills grants, green building funding, and government-backed finance — with asset finance (backed by the Growth Guarantee Scheme) ideal for plant and machinery and invoice finance well suited to the sector’s long payment terms and retentions. Grants usually need match funding and combine with finance. Match the funding route to whether you’re investing in equipment, skills, capacity or cash flow.
Key takeaways
- Asset finance (GGS-backed) suits plant, machinery and vehicles.
- Invoice finance eases the sector’s long payment terms and retentions.
- The Growth Guarantee Scheme supports term loans, overdrafts and more.
- Green building and skills grants can support investment and workforce.
- Grants usually require match funding and combine with finance.
- Match the funding route to the specific need.
Construction firms face particular funding pressures — expensive plant and machinery, long payment terms and retentions, skills shortages, and growing demand for sustainable building. Established construction businesses can meet these with a mix of government grants and government-backed finance. This guide explains what is available and how to use it.
Funding plant and machinery
For the equipment that construction depends on, asset finance is usually the most suitable route — and it can be backed by the Growth Guarantee Scheme. The asset typically provides security, and the cost is spread over its useful life, protecting cash flow. This suits plant, machinery and vehicles, letting you invest in capacity without tying up a large lump sum. Where a capital grant is available, it can fund part of the cost alongside finance.
Managing cash flow: invoice finance and overdrafts
Cash flow is a perennial challenge in construction, with long payment terms and retentions tying up money. Two scheme-backed facilities help:
- Invoice finance releases cash from unpaid invoices, bridging the gap between doing the work and being paid.
- Overdrafts provide flexible working capital for the ebb and flow of project costs.
Both are available under the Growth Guarantee Scheme, with a government guarantee that improves access.
Construction’s long payment terms and retentions make invoice finance especially valuable — it turns work you’ve delivered but not yet been paid for into available cash.
Green building and net zero
Sustainability is increasingly central to construction, and green and net-zero grants can support energy-efficiency and low-carbon measures. These align with growing demand for sustainable building and can combine with finance for larger projects, while also positioning your firm for work where environmental standards matter.
Skills funding
Construction faces well-known skills shortages, and training and skills funding can support workforce development. Availability varies, so check the business support finder, sector bodies and your growth hub for current schemes. Investing in skills, part-funded where grants allow, supports both capacity and quality.
The funding routes at a glance
| Need | Best route |
|---|---|
| Plant & machinery | Asset finance (GGS-backed) |
| Cash flow / retentions | Invoice finance or overdraft (GGS-backed) |
| Green building | Net-zero / energy grants plus finance |
| Workforce | Skills and training grants |
| General growth | Growth Guarantee Scheme term loan |
Who is eligible and how to apply
Eligibility varies by programme and may depend on your size, location and project, with much support aimed at established construction SMEs. To access it: check your growth hub, the business support finder, sector bodies and regional programmes for grants; speak to accredited lenders or a broker about finance and asset finance for plant; and plan match funding to combine grants with finance where it helps.
The bottom line
Established UK construction firms can fund equipment, cash flow, sustainability and skills through a mix of government grants and government-backed finance — with asset finance ideal for plant, invoice finance for the sector’s cash-flow gaps, and the Growth Guarantee Scheme behind both. Match the route to the need, plan match funding, and use a broker for equipment finance to build the funding your construction business needs to grow.
Frequently asked questions
What government funding is available for construction firms?
Construction businesses can access regional and skills grants, green building and energy-efficiency funding, government-backed finance such as the Growth Guarantee Scheme, and asset finance for plant and machinery. The right mix depends on whether you are investing in equipment, skills or capacity.
Can construction firms use the Growth Guarantee Scheme?
Yes. Eligible construction SMEs can access the Growth Guarantee Scheme through accredited lenders for term loans, overdrafts, asset finance and invoice finance, with a government guarantee that improves access — useful given the sector’s cash-flow demands.
How do I fund plant and machinery?
Asset finance is often the best route, and it can be backed by the Growth Guarantee Scheme. The asset provides security and the cost is spread over its useful life, protecting cash flow — well suited to plant, machinery and vehicles.
Is there funding for green building and net zero?
Yes. Green and net-zero grants can support energy-efficiency and low-carbon measures, which are increasingly relevant to construction. These can combine with finance for larger projects and align with growing demand for sustainable building.
Are there skills grants for construction?
Training and skills funding can support workforce development in construction, where skills shortages are common. Availability varies, so check the business support finder, sector bodies and your growth hub for current schemes.
How does invoice finance help construction firms?
Construction often involves long payment terms and retentions, tying up cash. Invoice finance — which can be backed by the Growth Guarantee Scheme — releases cash from unpaid invoices, easing the cash-flow gaps common in the sector.
Who is eligible for construction funding?
Eligibility varies by programme and may depend on your size, location and project. Much support targets established construction SMEs investing in equipment, skills or capacity. Check each programme’s criteria.
Do construction grants require match funding?
Often, yes. Grants typically cover part of a project’s cost, with the business funding the rest, possibly with finance. Confirm the match requirement before applying.
Can I combine grants and finance for a construction project?
Yes, commonly. A grant might cover part of a project, with asset finance or a government-backed loan funding the rest, subject to the rules and any subsidy limits.
How do I manage cash flow in construction?
Beyond funding, options such as invoice finance and overdrafts (both available under the Growth Guarantee Scheme) help bridge the gaps between paying for labour and materials and being paid. Good cash-flow management is critical in the sector.
Where do I find construction funding?
Check your local growth hub, the business support finder, sector bodies, and regional programmes for grants, and speak to accredited lenders or a broker about finance and asset finance for plant.
Are construction grants taxable?
The tax treatment depends on the grant’s nature and purpose. Confirm with your accountant, as it affects the net value.
Can a broker help construction firms fund equipment?
Yes. A broker can arrange asset finance for plant and machinery and a government-backed facility for working capital, and help structure a package alongside any grant.
Ready to compare your options?
Get a free, no-obligation quote in about two minutes — soft search only, no impact on your credit score.
Get your free quoteThis article is general information, not financial advice. Eligibility, rates and terms vary by lender and your circumstances. The Loans Hub is a finance broker, not a lender.
