Finance for Contracting

Patricia M. Hillebrandt

Chapter 16 in Analysis of the British Construction Industry, 1984, pp 275-282 from Palgrave Macmillan

Abstract: Abstract Finance is not a resource in the same sense as manpower or materials. It is a mechanism by which requirements for capital of a person or organisation are met by drawing on savings. These savings may be internally generated or from outside the organisation. It is necessary because production and sale cannot take place instantaneously and thus there is a need to finance outgoings before receipts are obtained. Finance is needed mainly to purchase fixed assets and to use as working capital to pay for goods and services which will be incorporated in buildings and works for the period of time before payment for these is made by the client. Since the normal way of paying for construction on site is on a monthly certificate by the professional team, minus a retention, usually of 5 per cent, the time lag between expenditure and receipt of payment should be quite short and the working capital requirements consequently low.

Keywords: Bank Loan; Construction Company; Fixed Asset; Working Capital; Deferred Taxation (search for similar items in EconPapers)
Date: 1984
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DOI: 10.1007/978-1-349-06660-5_16

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