Since its foundation in 2009, Aldermore has established itself as one of the UK’s fastest-growing alternative banks serving homeowners, landlords and SMEs, supporting over 56,000 businesses and lending more than £2.5bn
In this ebook, Andrew Dixon, Aldermore’s commercial director for specialist finance, looks at how small and medium-sized firms can navigate the tightening construction market and uncertain economic landscape.
A key issue for many SMEs is larger firms being more assertive in controlling their cash flows and the growing use of mechanisms in contracts to tighten up on payments, including Pay Less Notices.
With subcontractors under pressure to pay staff and cover their overheads, this can lead to disputes where the subcontractor needs to contest the Pay Less Notice in order to protect their financial interests yet must also continue working on site so as not to breach the terms of their contract.
Dealing with a payment dispute is by no means straightforward and often ends in lengthy – and costly – arbitration, only adding to the pressure on smaller firms. This forces some to accept much lower settlements, wiping out already thin margins.
With such situations becoming more common, it is essential that SME contractors ensure they are taking all the steps they can to protect their position.
In this publication, Andrew sets out Aldermore’s five Steps to Construction Success, dealing with cash flows, invoicing, tracking work progress and the importance of obtaining professional advice in the event of arbitration.
While no company wants to get into a dispute, the fact is they are on the rise and in an increasingly challenging construction market, firms must be prepared to deal with them.