Commercial disputes over contract delivery, specification, or defects can result in a customer withholding payment that your company was counting on. The legal and mediation process to resolve a dispute can take months. During that time your company's overheads — wages, rent, utilities, suppliers — continue as normal, even though a significant receivable is frozen.
Why this situation is distinct from a bad debt
A disputed invoice is not necessarily a bad debt. If the dispute is over a specification difference or a punch-list of minor remediation items, the underlying obligation to pay often remains; the question is when and at what figure. A Creditcorp facility used to bridge this period is repaid once the dispute resolves and the customer pays — making the repayment event concrete, even if the date is uncertain.
Structuring finance around a dispute timeline
Mediation and adjudication in construction disputes can resolve within 28 days under the Housing Grants, Construction and Regeneration Act. Commercial mediation for other disputes often settles within one to three months. A Creditcorp facility sized to cover your operating costs during that window gives you the runway to pursue the dispute properly rather than accepting a discounted settlement under cash pressure (illustrative approach — terms depend on your application).
What to have in place before drawing
- Written legal advice on the strength of your claim and a realistic resolution timeline.
- A clear picture of your monthly operating costs so you draw only what you need.
- A plan for repayment from trading income if the dispute takes longer than expected.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: What can my company do when a large customer invoice is paid late?, Can business finance help bridge a short-term cashflow gap?.