Construction project funding
Funding is the means by which financial resources, typically capital, but sometimes also time, skills, land, information, etc., are provided for the purposes of a construction project. Funding tends to refer to reserves that are internal to the organisation, while the external sourcing of capital is referred to as financing (although the terms are sometimes used as if they are interchangeable).
Public projects can be funded by allocating the necessary amounts from departmental and/or local budgets. If the project crosses more than one departmental budget then the project sponsor is generally responsible for securing project funds by working with different budget holders.
Funding can come from reserves that are already allocated to capital expenditure (capex), which results in the acquisition, construction or enhancement of significant fixed assets including land, buildings and equipment that will be of use or benefit for more than one financial year. For more information, see Capex.
It can also come from operational expenditure (opex), which is expenditure incurred as a result of the day-to-day operations of a business. For more information, see Opex.
Since internal funding is generally limited, conditions are often attached to when funds can be committed, and the business planning cycle is often a determining factor for allocating funds.
There are several funding arrangements based on the formation of partnerships with external organisations, including:
Some projects can be self-funding, which means that the earlier work stages generate enough revenue to fund the later work stages.
External financing of projects can take the form of loans, funds from shareholders, venture capital, grants, donations, subsidies, ‘crowdfunding’, and so on.
Project-based finance (or project-based lending PBL), is a system of financing a project in which the financial security is provided by the property being acquired or developed itself.
[edit] Related articles on Designing Buildings
Featured articles and news
Delivering for tenants; National Retrofit Hub
New report offers recommendations to strengthen energy efficiency standards to protect private renters.
Government consultations for the summer of 2025
A year of Labour, past and present consultations on the environment, the built environment, training and tax.
CMA competitiveness probe of major housing developers
100 million affordable housing contributions committed with further consultation published.
Homes England supports Greencore Homes
42 new build affordable sustainable homes in Oxfordshire.
Zero carbon social housing: unlocking brownfield potential
Seven ZEDpod strategies for brownfield housing success.
CIOB report; a blueprint for SDGs and the built environment
Pairing the Sustainable Development Goals with projects.
Types, tests, standards and fires relating to external cladding
Brief descriptions with an extensive list of fires for review.
Latest Build UK Building Safety Regime explainer published
Key elements in one short, now updated document.
UKGBC launch the UK Climate Resilience Roadmap
First guidance of its kind on direct climate impacts for the built environment and how it can adapt.
CLC Health, Safety and Wellbeing Strategy 2025
Launched by the Minister for Industry to look at fatalities on site, improving mental health and other issues.
One of the most impressive Victorian architects. Book review.
Common Assessment Standard now with building safety
New CAS update now includes mandatory building safety questions.
RTPI leader to become new CIOB Chief Executive Officer
Dr Victoria Hills MRTPI, FICE to take over after Caroline Gumble’s departure.
Social and affordable housing, a long term plan for delivery
The “Delivering a Decade of Renewal for Social and Affordable Housing” strategy sets out future path.
A change to adoptive architecture
Effects of global weather warming on architectural detailing, material choice and human interaction.
The proposed publicly owned and backed subsidiary of Homes England, to facilitate new homes.
How big is the problem and what can we do to mitigate the effects?
Overheating guidance and tools for building designers
A number of cool guides to help with the heat.
The UK's Modern Industrial Strategy: A 10 year plan
Previous consultation criticism, current key elements and general support with some persisting reservations.
Building Safety Regulator reforms
New roles, new staff and a new fast track service pave the way for a single construction regulator.