Cases · Case detail
How a foundation contractor strengthened its financial footing
A construction firm specialising in laying foundations could handle larger projects, but not at the same time. The bank held on to the security and would not go further. A business loan from SOOF Finance freed that headroom up, and factoring on the stage invoices could be added.
The situation
First on site, last to be paid
The business sits at the very start of the building process, with all the working capital pressure that comes with construction and infrastructure. The foundation is in place before anything becomes visible, and that means the costs come first too. Concrete, piles, plant and subcontractors go out long before the first stage can be invoiced. Factoring on those stage invoices bridges that gap.
"We are the first on the building site and the last to be paid," Marco says. "That is not a problem, as long as you can carry it."
Carrying it got harder as the projects grew larger. "Two projects at once was fine. At three it started to pinch, and then you have to push a contract back or turn it down."
The bank offered no headroom. It did hold on to all the security. Receivables, plant and property were pledged, even though the facility itself was modest.
"That is where everything came unstuck. On paper we were healthy, but we could do nothing with what we had. Every financier we spoke to asked whether the security was free, and that was the answer that ended the conversation."
The approach
Buy out the bank first, then let the headroom work
SOOF Finance started with the bottleneck itself: the security position. Not with a new product, but with the question of what was needed to prise the existing situation loose.
"They handled the process with the bank themselves. I did not end up in the middle of it, and that is exactly what you want. You have a bank relationship you still need afterwards."
How it works
A business loan funded the buy-out of the bank position. That released the security and made it usable again. That sequence is exacting, with several parties at the table, and SOOF kept control of it.
Then came the second step. Factoring started running on the clients' stage invoices, so that the money no longer sits locked for months between the completion of a phase and payment for it.
The combination is what makes the difference. The loan prised the situation loose, the factoring keeps the cashflow going. "And it all runs through one party. I have one point of contact and one overview, not three financiers pointing at each other."
The results
ReviewsReviews
What others say
Through working with SOOF, we are strong in more than just foundation work.
The onboarding was well organised. A simple process with fast payment.
We are very satisfied with what they offer, the way they work and the speed of payment. On top of that they think along with us actively and are always easy to reach. The contact is pleasant and professional.
We grow seriously every year, but finding suitable finance for a young business turned out to be hard. From the first contact with SOOF: short lines, pointed questions, quick to move. My feeling straight away was that they understand entrepreneurs here.
SOOF responds to the growing capital need in automotive. Vehicles on their way to their final destination are advanced against efficiently, so that we keep enough working capital to keep growing. Short lines, quick decisions, and a relationship that goes further than the transaction.
Marco
Directeur van een bouwbedrijf gespecialiseerd in funderingen, regio Midden-Nederland
"Through working with SOOF, we are strong in more than just foundation work."
"We can now run three projects at once instead of two. That is not a matter of working harder, that is a matter of having room."
"The best part is that things have become calm. I no longer lie awake over a stage payment that arrives two weeks later than planned."
Frequently asked questions
As long as your receivables are pledged to the bank, a factoring provider cannot fund them. The loan buys out that position, after which the security is released and factoring can go ahead.
No. SOOF coordinates the process and keeps control towards your bank. Several parties are involved and the order is exacting, so we do not leave that with you. How taking over a pledge works is set out in what is a pledge.
Yes. We go through what your project invoicing looks like and match the advance to it. In construction, stage invoicing is the standard.
For SMEs. We work to measure, including in more complex situations.
The situations in our cases come from our own practice. We publish them anonymised: names, companies, amounts and other details have been changed, so that a case cannot be traced back to an individual client. Working capital is client data, and we keep that confidential. A case describes one situation and says nothing about the outcome in your case.
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