Can a newly formed construction company obtain factoring after a previous business has experienced insolvency, even if the director is not a homeowner? In some circumstances, yes.
Wise Factoring recently arranged a £150,000 construction factoring facility for a newly incorporated business whose director’s previous company had experienced serious financial difficulties and was subject to insolvency proceedings.
The director was a non-homeowner, the new company had only been incorporated on 5th August 2026, and specialist due diligence was required around the transfer of assets, ownership of invoices and the previous business.
Wise Factoring became involved on 26th August. By 18th September, the facility was operational and a sizeable first drawdown had been released.
The Challenge
The enquiry came through a business consultant who had previously recommended Wise Factoring to other clients.
It was immediately clear that this would not be a straightforward invoice finance application.
The director’s previous construction business had experienced significant financial difficulties and was subject to insolvency proceedings, including a winding-up petition. Significant factoring costs from its previous provider had added further pressure to an already difficult financial position.
However, there was still a viable underlying business.
The director had taken professional restructuring advice and established a new company on 5th August 2026. The plan was to operate a much leaner business, with a smaller core workforce, lower overheads and a greater focus on profitable contracts and choosing the right customers.
Projected turnover was approximately £1 million, with the potential to grow towards £2 million with appropriate working-capital support.
The challenge was finding that support.
Why Was This Construction Factoring Application Difficult?
There were several issues that significantly reduced the number of invoice finance providers likely to consider the application:
- The construction company was newly incorporated with almost no trading history.
- The director’s previous business had experienced serious financial difficulties and was progressing through an insolvency process.
- The director was a non-homeowner.
- The business operated in the construction sector.
- Assets and trading activity were being transferred from the previous company and needed to be properly documented.
- There was an urgent requirement for working capital to support employees and ongoing contracts.
Taken individually, some of these factors can restrict funding options. Combined, they required a specialist approach.
This is where knowledge of the invoice finance market became particularly important.
Finding a Specialist Construction Factoring Provider
Wise Factoring works with a broad range of invoice finance providers, including specialist funders prepared to consider situations that fall outside mainstream criteria.
Rather than submitting the application widely and hoping somebody would accept it, we identified a specialist funder that we believed would take the time to understand the circumstances surrounding the previous company and assess the viability of the new business on its own merits.
A £150,000 selective invoice finance facility was offered, providing an 80% initial advance against eligible invoices.
Getting the offer was only part of the job.
Because of the circumstances surrounding the previous company, additional due diligence was required. The funder’s risk team needed comfort around the transfer of assets, ownership of the debtor book and whether anything arising from the previous company could affect its ability to fund the new facility.
This required cooperation between the director, restructuring professionals, the specialist funder, customers and Wise Factoring.
Invoices and purchase orders also had to be verified before funding could be released.
More Than Just Arranging a Factoring Facility
There was a very human side to this transaction.
During the process, we took several late-night calls from a very stressed and worried business owner.
Employees were relying on the business to pay their wages so that they could meet their own rent, mortgages and household bills. The pressure on the director was very real.
There were points when the transaction became complicated and the available funding options appeared extremely limited.
But we didn’t stop believing there was a viable business underneath the problems of the previous company.
We couldn’t change what had happened before. Our job was to understand it, establish what had changed, present the new business properly and find a specialist funder prepared to consider the whole story rather than simply say no.
The Result: From Introduction to Funding in Just Over Three Weeks
The new company was incorporated on 5th August 2026.
Wise Factoring became involved on 26th August 2026.
By 18th September 2026, the £150,000 construction factoring facility was operational and a sizeable first drawdown had been released.
That’s just over three weeks from our initial involvement to funding.
For a newly incorporated construction company with a non-homeowner director and significant issues surrounding the previous business, this represented an excellent outcome.
The facility now gives the company access to working capital as eligible invoices are raised, providing financial headroom to support existing contracts and its plans to grow turnover from approximately £1 million towards £2 million.
Most importantly, it gave a viable business the opportunity to carry on.
What the Client Said
“Thank you for sorting out my new factoring facility. The stress over the last few months has been unreal, but at least we can carry on now.
We’ll make sure we choose the right clients, which will help us in the future. I’m so glad you were recommended to us.”
Director, UK Construction Company
Construction Factoring FAQs
Can I get a construction factoring facility if I’m not a homeowner?
Yes, potentially. You do not always need to be a homeowner to obtain construction factoring or invoice finance.
Being a non-homeowner can reduce the number of funders willing to consider a higher-risk application, particularly where there are other complications. However, specialist invoice finance providers may focus more heavily on the quality of the debtor book, underlying contracts, customers, invoice verification and viability of the business.
In this case, Wise Factoring arranged a £150,000 facility for a newly incorporated construction business whose director was a non-homeowner.
Can I get construction factoring if my previous business was wound up or liquidated?
Potentially, yes. A previous company entering liquidation or being wound up does not automatically prevent a director from obtaining invoice finance for a new company.
The funder is likely to want to understand why the previous company failed, what has changed, whether the new business is viable and whether assets, contracts and invoices have been transferred correctly.
Cases involving a previous insolvency often require specialist underwriting and greater due diligence than a standard factoring application.
Can a new construction company get factoring with no trading history?
Yes. Some invoice finance providers will consider newly incorporated construction companies with little or no trading history.
Invoice finance differs from many conventional business loans because funding is linked to eligible invoices and the customers responsible for paying them.
The experience of the directors, quality of customers, nature of contracts and ability to verify invoices can therefore be particularly important.
In this case, the company was incorporated on 5th August and had its factoring facility operational by 18th September.
Can a Phoenix company obtain invoice finance after the previous company has failed?
It may be possible to arrange invoice finance for a new company established following the failure or insolvency of a previous business.
These applications generally require additional due diligence. A funder may need to establish ownership of assets, contracts and debtor balances and understand exactly what happened to the previous business.
The funder’s risk team may also require direct communication with the restructuring or insolvency professionals involved.
This is an area where approaching a provider experienced in complex or restructuring-related invoice finance cases can be particularly important.
Can I get construction factoring if my previous company owed money to HMRC?
Previous HMRC arrears do not necessarily prevent a new company from obtaining construction factoring.
A funder will normally consider the circumstances behind the previous arrears, what caused the financial difficulties, whether those issues have been addressed and whether the new business has a sustainable structure.
Full disclosure from the outset is important, particularly where a new business has been formed following financial difficulties in a previous company.
How quickly can a new construction company arrange factoring?
A construction factoring facility can sometimes be established within weeks, although timescales depend on the complexity of the case.
Straightforward facilities may progress faster, while applications involving insolvency, asset transfers, debtor verification or other historic issues can require additional due diligence.
In this case, Wise Factoring became involved on 26th August and funding was released on 18th September — just over three weeks later.
Can construction factoring help me pay wages while customers take 30 or 60 days to pay?
Yes. Improving working capital while waiting for customers to pay is one of the main uses of construction factoring and invoice finance.
Instead of waiting for an eligible invoice to reach its normal payment date, an invoice finance provider can release an agreed percentage of its value earlier.
Businesses can then use the available working capital for normal operating costs such as wages, subcontractors, materials and other business expenses.
Can I get factoring after being with another invoice finance company?
Yes. Having previously used another factoring or invoice finance provider does not automatically prevent a business or director from arranging another facility.
Where the previous relationship involved financial difficulties, disputes or an insolvent company, a new provider is likely to investigate the circumstances carefully.
Different funders have different appetites and underwriting criteria, which is one reason specialist market knowledge can be valuable.
I’ve been turned down for construction factoring. Could another invoice finance company still help?
Possibly. A decline from one invoice finance company does not necessarily mean every provider will reach the same decision.
Funders have different attitudes towards construction, start-ups, previous insolvencies, non-homeowner directors and complex restructuring situations.
Rather than making multiple applications indiscriminately, a specialist broker can identify providers whose appetite is more closely aligned with the circumstances of the business.
Need Construction Factoring for a Difficult or Unusual Situation?
If your construction business needs working capital but you’ve been told your circumstances are too complicated for invoice finance, it may be worth getting a second opinion.
Wise Factoring specialises in understanding more complex cases and knowing which invoice finance providers may be prepared to look beyond the obvious difficulties.
Whether you’re running a newly incorporated construction company, you’re a non-homeowner, you’ve experienced problems with a previous business or you simply don’t fit mainstream funding criteria, there may still be options available.
Talk to Wise Factoring about your circumstances before assuming the answer is no.
Every application is subject to individual assessment and funder approval. Previous outcomes do not guarantee that funding will be available in other cases.
