THE first early payment schemes for medium sized construction contractors have been launched by alternative lending specialist Nucleus Commercial Finance.
Under an early pay scheme suppliers pay a fee to have their invoices settled early with payments coming direct from the bank rather than the main contractor.
Nucleus Managing Director Chirag Shah says that until now such schemes have only been offered to the largest contactors, leaving a noticeable gap in the market. He said, “These early payment schemes have proved very popular with both contractors and suppliers alike, but they have been limited in their scope.
“We believe that medium sized contractors with turnovers of over £20million should also have the opportunity to offer early day payment schemes to sub-contractors.
“Medium sized contractors often feel under-served by their banks which is where we come in – Nucleus can set-up and run these schemes for them.”
Chirag says that suppliers like the scheme because it gives them a guaranteed cash flow and certainty of payment. “Main contractors also benefit from a more predictable cash flow while they can build better relationships with trade contractors by offering them favourable terms.”