Best UK business loans for construction
Construction borrowing is shaped by CIS retentions and stage-payment cycles. Specialist construction lenders dominate over generalists because they understand the cash-trap problem unique to the sector.
Director, BestBusinessLoans
Oliver leads BestBusinessLoans's editorial reviews and methodology. With a background in UK commercial finance, he oversees lender research, rate verification and review independence.
Last reviewed: 26 April 2026
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SME term loan + commercial mortgage · £150k to £5m · 5 to 10 business days
Asset finance for plant plus commercial mortgages for owned yards. Strongest mainstream option.
Read full Allica Bank review → -
Term loan · £10k to £500k · 1 to 3 business days
Term loans for established Ltd contractors with clean credit.
Read full Funding Circle review → -
Flexi-loan / line of credit · £1k to £500k · Same day to 24 hours
Working capital bridging stage payments; flexi-loan helps with CIS retention timing.
Read full iwoca review → -
Merchant cash advance + term loan · £3.5k to £500k · Same day
MCA against any card flow, useful for construction with retail-side revenue (e.g. landscape contractors with garden-centre arms).
Read full Capify review → -
Term loan with flex features · £5k to £500k · 24 to 48 hours
Flex features genuinely useful for stage-payment-driven cashflow.
Read full Fleximize review →
Side-by-side comparison
| Lender | Typical rate | Ticket | Decision | Best for |
|---|---|---|---|---|
| Allica Bank | From 7.99% APR | £150k to £5m | 5 to 10 business days | Asset finance for plant plus commercial mortgages for owned yards. Strongest mai... |
| Funding Circle | 6.9% to 26.9% APR | £10k to £500k | 1 to 3 business days | Term loans for established Ltd contractors with clean credit. |
| iwoca | From 2% per month | £1k to £500k | Same day to 24 hours | Working capital bridging stage payments; flexi-loan helps with CIS retention tim... |
| Capify | Factor rate 1.15 to 1.45 | £3.5k to £500k | Same day | MCA against any card flow, useful for construction with retail-side revenue (e.g... |
| Fleximize | From 0.9% per month | £5k to £500k | 24 to 48 hours | Flex features genuinely useful for stage-payment-driven cashflow. |
What is the best business loan for a UK construction company?
For plant and equipment, asset finance from Allica Bank or Aldermore. For working capital across CIS retentions and stage payments, an iwoca flexi-loan. For owned yards and offices, an Allica or Shawbrook commercial mortgage.
How do CIS retentions affect UK construction lending?
CIS retentions (typically 5% of contract value held against defects) lock cash in for 6 to 12 months. Lenders that understand construction underwrite on net-of-retention turnover. Generalist lenders often miss this and over-decline.
Can UK subcontractors with stage-payment cycles get finance?
Yes, but invoice finance fits better than term debt for the working-capital piece. iwoca flexi-loan covers shorter gaps. Term debt suits asset purchases and one-off investments, not the recurring stage-payment cash trap.
What is the typical asset finance rate for UK construction plant?
Hire purchase on plant typically prices at 7% to 12% APR depending on age of asset, deposit and credit profile. Used plant prices higher than new. Established Ltd contractors with clean credit reach the cleaner end.
Do main contractors and subcontractors face different lending criteria?
Yes. Main contractors are underwritten on contract pipeline and end-client quality. Subcontractors are underwritten on main-contractor concentration risk; high reliance on one main is itself a decline reason at some lenders.
How we ranked these
Weighted on construction sector specialism (25%), CIS-aware underwriting (20%), asset finance for plant (20%), decision speed (15%), Trustpilot record (20%).
Methodology weights
Weights specific to "Best UK business loans for construction":
- Construction sector specialism25%
- CIS-aware underwriting20%
- Asset finance for plant20%
- Decision speed15%
- Trustpilot record20%
Full methodology.
Also considered
- Specialist construction asset-finance lenders
- Bibby (invoice finance for sub-contractors)
Not for
Sole traders without strong banking history; new contractors tied to a single main-contractor.
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Open our /get-quotes/ form →Reviewed by Oliver Mackman, Director. Last reviewed: 2026-04-26.