According to research by accountant Wilkins Kennedy the number of construction firms borrowing against unpaid invoices jumped 17% last year to nearly 2,000.
Just 1,160 construction firms used invoice financing five years ago before the financial crisis. Since then the number has jumped by 65%.
The extent of the industry’s financing problems was underlined by official bank lending figures which showed lending to construction has fallen 17% to £20bn.
“The construction industry has been badly hurt by the reluctance of banks to lend to even the most solvent businesses in this sector,” said Wilkins Kennedy head of property Nick Parrett.
“New finance is the lifeblood of any business and, without bank lending, construction firms are having to pursue alternative options,” Parrett added.