Contractor Insolvency: Why Early Warning Matters for Lenders and Investors

The recent collapse of Henry Construction Projects following the payment of significant sums to its directors in the months prior to administration serves as a clear reminder of the financial exposure faced by lenders and investors in today’s market: https://www.constructionnews.co.uk/legal/millions-paid-to-henry-family-before-collapse-administrators-claim-05-06-2025/. When a contractor fails, the impact on a development can be immediate and severe, including delays, cost escalation and complex recovery procedures.

At Kingswood, we recognise that strong project monitoring is one of the most effective ways to manage and mitigate this risk.

Our role as project monitors goes beyond tracking progress. We are engaged to safeguard the appropriate use of development funding, review cost-to-complete forecasts and assess whether programme assumptions remain viable. We maintain a clear line of sight into contractor performance both on site and behind the scenes so that any early warning signs can be reported without delay.  

These indicators may include:

• Irregular payment patterns or front-loaded valuations
• Delays in securing key trades or materials
• Signs of subcontractor distress or late payments
• Unexplained reductions in labour or programme slippage

Where concerns arise we support lenders in applying enhanced oversight, revisiting funding strategies, and working with the sponsor to work through options to complete schemes successfully to ensure that projects remain viable and capital is protected.

With insolvency risk remaining high in the construction sector and development funding under increasing scrutiny, early detection and professional monitoring provide critical reassurance to stakeholders.

To find out how Kingswood supports lenders, investors and developers across the UK, please get in touch.

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