2 min read
The cashflow challenge for solar installers
Solar panel installation companies — particularly those targeting commercial rooftops, agricultural buildings, and industrial estates — typically purchase panels, inverters, racking systems, and cabling before any payment arrives from the client. On larger projects, staged payments may leave a firm out-of-pocket during the installation phase.
When multiple projects run simultaneously, the combined stock requirement can stretch a firm's working capital well beyond what retained earnings can comfortably cover. A revolving credit facility gives directors the headroom to take on more projects without forcing a choice between growth and solvency.
Funding stock and procurement
Bulk purchasing panels and inverters at favourable prices often requires committing to suppliers ahead of confirmed site starts. Commercial finance can bridge the period between procurement and project drawdown, allowing a business to lock in pricing without tying up all available cash.
Directors considering stock-finance or supply-chain facilities should confirm with their accountant how the facility will appear on the balance sheet and whether VAT on purchased goods creates a short-term timing mismatch that needs to be factored into cash-flow forecasts.
Scaling the installation team
Accredited MCS installers and electricians are a constrained resource. Hiring additional qualified engineers — or acquiring a smaller competitor to bring headroom — often requires upfront capital that commercial lending can provide. Acquisition finance for a strategic purchase in the solar sector is a recognised use of business loans, provided the acquiring entity is a UK limited company or LLP.
What lenders look at in this sector
Solar installation is a relatively young sector with a mixed credit history across the industry, so lenders will typically look closely at the quality of the order book, the profile of end clients (commercial versus residential), and whether the business has MCS accreditation and relevant electrical qualifications in place.
- Signed or LOI-stage commercial contracts
- Supplier relationships and credit terms in place
- MCS certification and electrical contractor registration
- Debtor concentration — are you reliant on one or two large clients?
Frequently asked questions
Does Credicorp lend to solar firms doing purely residential work?
Credicorp is a business lender to limited companies and LLPs. If the entity is a limited company performing residential solar installation commercially, it may qualify — the legal structure of the borrowing entity matters, not the end customer's property type.
Can we borrow to purchase a competitor solar business?
Acquisition finance for a qualifying limited company or LLP is within scope. The assessment will focus on the combined business post-acquisition, the price paid relative to assets and earnings, and the integration plan.
Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.