By James Sayer I Insights
Claiming Finance Charges on Construction Projects - Can You Do It?
Let’s talk about money - not the money you’re being paid for your work but the money it takes to actually get a job done. Because here’s the truth; delivering a project often means dipping into your own pockets first. Loans. Overdrafts. Invoice finance. You do what you need to do to keep the wheels turning.
But that financing isn’t free and the big question is: can you claim those finance charges back?
The answer: MAYBE - but only if you’ve done your homework.
Start with the contract
(yes, again)
Like most things in construction, it all starts with the contract. Some contracts are watertight. Others… not so much. If your contract has clear provisions for reimbursing finance charges, you’ve got a solid leg to stand on. But if it doesn’t? You’ll need to get creative and cautious.
Look for anything that covers:
• Reimbursable costs
• Loss and expense due to delay
• Interest on late payments
If it’s not written in black and white, it doesn’t mean you’re out of luck but it does mean you’ll need to build a case.
When finance becomes part
of the story?
Let’s say you’re only borrowing because the client hasn’t paid you on time or because a last-minute scope change forced you to bring in more kit, fast. In cases like these, finance costs might be considered a knock-on effect of the client’s actions. That gives you a potential path to recovery, especially if it’s part of a wider disruption or delay claim.
But you’ll need to prove two things:
1. The costs were necessary
2. The client’s actions caused them
That’s not always easy.
Keep your paper trail sharp
Claims are built on evidence not opinions. If you want to recover finance charges, you’ll need to show your working:
• Loan agreements
• Repayment schedules
• Evidence of when payments were missed
• Documentation linking the delays to extra costs
The better your records, the stronger your case.
What the law says
UK courts have historically taken a cautious approach when it comes to finance claims. The default view is often: “your funding, your risk.” But where there’s clear cause and effect and a good contract, you’ve got room to move.
By James Sayer
Commercial Consultant
Helping contractors protect their bottom line,
one clause at a time.
So, what should you do?
Here’s the takeaway:
• Don’t assume finance charges are recoverable
• Do check your contract before you sign and amend it if needed
• Keep records from day one
• Seek advice early if delays or finance costs are stacking up
In construction, margin is everything. Don’t leave potential recovery on the table because of poor planning or missing paperwork.