Construction continues to record the highest number of insolvencies of any sector in the UK. Recent figures show that close to 4,000 construction firms went under in the last year alone, accounting for around 16–17% of all business insolvencies (BCIS; UK Government, 2025).

It’s part of a pattern that’s been building over the last few years, with construction consistently topping insolvency tables.

Why construction businesses are under pressure

Most firms aren’t struggling because of a lack of work, in many cases, they’ve got too much of it – but the real issue is timing and rising costs.

Labour, materials, equipment, and overheads all go out upfront, often across multiple projects at once. Meanwhile, payments coming back in don’t always line up the way they should.

Then layering in the usual challenges:

• Payment terms stretching further than expected
• Delays that push projects back
• Ongoing cost pressure across materials and labour
• The unpredictability that comes with running multiple sites

More projects mean more upfront costs, more coordination, and more reliance on everything running to plan. When one part slips, it has a knock-on effect across everything else.

In some cases, companies end up turning down work, not because they don’t want it, but because they can’t take it on without putting pressure on everything else.

Why insolvencies are staying high

There were over 23,000 company insolvencies across all sectors last year, with construction making up a significant proportion of that total (UK Government, 2025). Even compared to pre-pandemic levels, insolvencies in the sector remain notably higher.

It’s the cumulative effect of how the industry operates such as tight margins, long payment cycles, and constant pressure on cash flow.

When those issues aren’t addressed early, they tend to surface later, and often all at once.

Where funding can help

There’s still a mindset in parts of the industry that finance is something you look at when things have already gone wrong, but that is definitely not the case.

In reality, the stronger businesses are using it as part of how they operate and to plan ahead if you know you have something coming up.

Used properly, funding gives you room to manage projects without everything relying on perfect timing. It allows you to:

• Keep subcontractors and suppliers paid without delays
• Take on new work without overstretching
• Manage multiple projects
• Invest in equipment or growth when needed

Why working with the right broker matters

Not all funding options are built for construction…

We work across a wide panel of lenders, which means we can look at your situation properly and find something that works for your construction business. Whether it’s short-term support, something more flexible, or funding alongside ongoing projects, we can find you the best rate and solution.

It also saves time. Instead of going back and forth with multiple lenders, everything is handled in one place.

Be prepared!

Construction pressures are continuing to rise – the level of insolvencies across the sector reflects that.

The businesses that stay stable are usually the ones that plan ahead, understand their options, and put the right structure in place early.

References

• BCIS – Construction insolvency data
• UK Government – Company Insolvency Statistics 2025