Operating finance for builders and contractors
This page covers the operating and equipment needs of construction businesses. Property-development lending is a separate transaction requiring a different assessment.
Start with the job schedule and the cash dates. The contract value is not the amount available to spend today. Identify mobilisation, materials, subcontractors, wages and overhead, then the dates when claims can be submitted, approved and paid.
Worked timeline: a profitable job can still need cash
This simplified example starts with $10,000 of available cash. A $72,000 claim is submitted at the end of week 4. An assumed 10% retention leaves $64,800 received in week 5; $7,200 remains outside the forecast. The retention and payment timing are illustrative contract assumptions, not standard industry terms.
| Week | Costs paid | Customer cash received | Closing cash before new funding |
|---|---|---|---|
| 1 | $14,000 | $0 | −$4,000 |
| 2 | $16,000 | $0 | −$20,000 |
| 3 | $12,000 | $0 | −$32,000 |
| 4 | $8,000 | $0 | −$40,000 |
| 5 | $5,000 | $64,800 | $19,800 |
| 6 | $5,000 | $0 | $14,800 |
Swipe or scroll the table sideways to see every column.
The modelled week-end funding gap peaks at $40,000. If the $64,800 receipt moves to week 7 while the same costs continue, the gap reaches $50,000 at the end of week 6. The retained $7,200 is not treated as available cash or assumed released within either period.
The $60,000 of listed costs is below the $72,000 claim, but that difference does not fund the early weeks. This example excludes other business activity, finance charges and tax adjustments. Check daily timing as well: a payment due before a receipt within the same week can create a larger temporary gap.
The contract planner uses one recurring weekly-cost amount. To enter the varying weekly costs in this example, use the 13-week cash-flow forecast and record the net $64,800 receipt in its expected week. Keep the $7,200 retention outside that forecast until its release is expected. Use the contract planner separately to compare a simplified recurring-cost case with claim and retention timing.
Match each need to the right discussion
Atlas can help assess the separate equipment and project amounts before comparing the categories worth investigating. Focus on the repayment source and the cash the business can support if payment is late.
| Need | Finance category to consider | Key preparation |
|---|---|---|
| Machine used across jobs | Equipment finance | Quote, utilisation, running costs and planned ownership period |
| Defined project cash gap | Working capital or a business loan | Cost/receipt schedule, amount, duration and repayment source |
| Recurring timing gaps across jobs | A line of credit | Draw/repayment pattern, fees and cash available to reduce the balance |
| Receivables awaiting payment | Invoice finance where accepted | Aged ledger, customers, disputes, claims and retention terms |
Swipe or scroll the table sideways to see every column.
A progress claim, disputed amount or retention is not automatically an eligible invoice. Ask how the actual facility treats each item; do not base available funding on the full face value of claims.
Check the commitments that survive a delayed job
Include equipment repayments, insurance and other business costs that continue if a project moves. Review how existing debt, other jobs and customer concentration affect the ability to meet a new payment.
When comparing proposals, identify all fees, payment dates, security and guarantees, any final amount and early-repayment terms. A facility that covers mobilisation still needs a credible way to be repaid from collected cash.
Bring the project schedule to Atlas
We can help turn the schedule into a funding discussion: what is needed for the job, what belongs to machinery, the expected cash gap and the questions to compare across options.
Start the enquiry with the project stage, claim/payment terms and the date cash is needed. Include any retentions, disputes or changes to the timetable, so the preparation reflects the work as it stands.
What to prepare
- Project contract, cost schedule and planned claim dates
- Approval/payment terms, retentions and any disputed amounts
- Existing cash, debt payments and commitments across other jobs
- Equipment quotes and their expected work across projects
- Current receivables and customer concentration
- A delayed-receipt forecast and proposed repayment source
Common questions
Can retentions be included in invoice finance?
It depends on the specific facility and receivable. Show retention and progress-claim terms separately and ask how they are treated; do not assume a funding percentage applies to the entire contract value.
Can finance help pay subcontractors before a progress payment?
That is a working-capital need worth assessing. Bring the payment dates, expected receipt and other commitments so the amount and repayment source can be considered. Availability depends on the full proposal.
Should machinery and project costs use the same facility?
Not automatically. A machine may serve several contracts while project costs are recovered from a specific receipt. Compare the purpose and repayment period for each.
Does a signed contract guarantee approval?
No. It supports the business case, but the lender considers the business, cash flow, asset or receivable and its own requirements.
Is this the same as a property construction loan?
No. This page focuses on the operating needs of the construction business. A development or property-backed construction transaction needs a separate property-finance discussion.
General information only. Product terms and availability vary. Check the actual proposal and obtain advice appropriate to your circumstances.