BAX Construction has secured a six-figure financing package combining invoice finance and term debt after winning seven-figure local-authority contracts that increased the working capital required to support its growth.

The Wolverhampton contractor has put an invoice finance facility in place with FlexABL alongside funding from the Midlands Engine Investment Fund II through Frontier Development Capital and BCRS Business Loans, plus a term loan from ART Business Loans.

The individual facility sizes have not been disclosed, nor have the invoice-finance advance rate, pricing, maturity or recourse terms. The funders have described the overall package only as being worth six figures.

Its structure is nevertheless commercially significant because it combines financing designed for different points in the cash-flow cycle.

Invoice finance can release cash against eligible invoices as BAX completes work and bills customers. Term lending can provide more stable capital for expenditure that is not directly represented by an outstanding receivable.

That distinction is important for construction companies. Labour, subcontractor and materials costs can arise well before project invoices are certified and ultimately paid, and taking on larger contracts can therefore consume cash even while turnover is growing.

BAX has recently secured contracts worth seven figures with Wolverhampton and Sandwell councils for social-housing improvement work. The new facilities are intended to give the company enough working capital to pursue larger local-authority and commercial projects across the West Midlands.

The contractor has increased turnover eightfold over the past five years to more than £7.5m and is targeting £10m in the current year. That £10m figure is a company objective rather than achieved revenue. BAX currently employs around 20 staff and works with approximately 100 contractors.

The deal also demonstrates how specialist lenders can combine facilities where a single product would not provide enough capacity or the appropriate repayment profile.

For BAX, invoice finance follows the expansion of its sales ledger while the additional debt provides complementary liquidity. For the lenders, the package distributes the financing requirement across several providers rather than requiring one institution to fund the entire growth plan.