Quick answer
Trades and construction businesses typically carry wages, materials and subcontractors long before progress claims and final payments arrive, with retentions held back. Funding that fits includes invoice and contract funding, equipment finance, and a line of credit for timing gaps. BAS, PAYG withholding and Payday Super make the squeeze tighter.
Key points
- Costs are paid up front; income arrives in stages, late, and sometimes partly held back.
- Progress claims and signed contracts are fundable assets by themselves.
- Utes, plant and tools are classic security, and a classic trap if over-financed.
- Tax obligations keep a calendar your customers do not.
- Typical pressure
- Wages and materials paid before progress claims land
- Assets to fund against
- Invoices, contracts, plant, vehicles
- Tax rhythm
- BAS, PAYG withholding and super, per payday from 1 July 2026
- Common detour
- Bank said no for lumpy income or thin history
A builder finishes the frame on Monday and issues a progress claim on Friday. The framers want paying this week, the timber yard wants paying this month, and the owner’s payment will not clear for several weeks, with a slice held back until practical completion. Meanwhile the ATO has its own diary. This is the ordinary cash-flow shape of Australian trades, and it is the reason a standard loan so often fits badly.
What squeezes trades and construction cash flow?
- Costs lead, income lags. Wages, materials and subcontractors are paid first. Progress claims are paid later.
- Retentions. Part of the contract price is held back until the job is complete or a defects period ends.
- Variations and disputes. Extra work that is not agreed in writing is hard to claim and harder to fund.
- Lumpy years. A big job lifts one quarter and leaves the next thin.
- Tax timing. PAYG withholding is reported on the activity statement, quarterly or monthly depending on how much you withhold. Quarterly BAS is due on 28 October, 28 February, 28 April and 28 July, and monthly BAS on the 21st of the following month. From 1 July 2026, Payday Super also means you pay super with each payday, rather than in a quarterly lump.
Which funding routes fit?
| Pressure | Route | Why it fits |
|---|---|---|
| Waiting on a progress claim | Invoice-backed funding | Funds the claim once issued and accepted |
| Won the job, need to start | Contract and order funding | Pays mobilisation costs before billing |
| New ute, trailer or plant | Equipment finance | The asset is the security |
| Quiet months between jobs | Line of credit | Draw in gaps, repay after the big claim |
| Own equipment, short of cash | Sale and leaseback | Releases capital, keeps the kit working |
| Property with equity | Property-secured loan | Larger amounts, thin history ok |
Illustrative example only. A civil contractor wins a council drainage job. Costs start in week one; the first claim will not be paid for another five weeks. Contract funding covers the pipe, hire and wages up front, then converts to invoice funding as claims are issued.
What do funders look at in a trades business?
- Who the customers are. Builders, developers, councils and commercial clients each carry different risk.
- The contract. Payment terms, retention, variations, termination rights.
- Your record of completing jobs on time and on budget.
- Assets. Plant and vehicles, with ownership and serial or VIN details.
- Statements. Clean business banking, with wages and suppliers visible and tax paid.
What do you need to hand over?
- Contracts or purchase orders and the latest progress claims.
- An aged debtors report and WIP schedule.
- Asset list with serial numbers or VINs.
- Business bank statements, BAS and PAYG records.
- A note of existing finance and security, including any claims on plant or debtors.
If you want a read on which route suits a particular job, tell us about it and a specialist will say what is realistic.
What are the traps?
Over-financing vehicles. Every ute with its own repayment adds up. Consider the total.
Funding a disputed claim. Funders will not take it, and neither should you plan around it.
Ignoring tax timing. Funding repayments that coincide with BAS and super can empty the account. The ATO suggests setting aside GST as you collect it.
Guarantees. Directors in construction are often asked for them. See director guarantees.
How do progress claims and cash flow interact?
A typical job runs on a cycle: win the work, buy materials, pay labour, claim progress, wait to be paid, repeat. The longer the wait between spending and getting paid, the bigger the funding gap. Shortening the claim cycle, by claiming regularly and accurately, often does more for cash flow than any facility. A claim submitted a week late is a week of extra funding.
Keep claims clean. Reference the contract, itemise the work done, attach evidence such as photos and sign-offs, and chase promptly. Funders looking at your invoices see the quality of your paperwork too, and a tidy claim history makes your invoices easier to fund.
What if a job goes wrong?
Jobs do go wrong: defects, delays, disputes, a customer in trouble. Tell your funder early, and keep records. A funder who hears about a problem when it starts is a partner. One who hears when payment is already overdue is an adversary. For your own protection, watch concentration: if one customer is most of your income, a single problem can stop the whole business, so spread risk where you can and avoid funding the same job twice.
When is a different route better?
If the problem is a bank decline because your income is lumpy, see seasonal and lumpy income. If you are a sole trader, read funding for sole traders. And if the issue is an ATO debt, the ATO debt page covers options.
Does your trade have a route that fits?
Almost certainly one that fits better than a flat loan. The enquiry takes a minute, involves no credit check, and does not scatter your details across lenders. A real person who understands how contracts and claims work calls you. Tell us the trade, the job and the gap as accurately as you can, so we match you properly first time. See if you qualify.
Frequently asked questions
Can I fund against a progress claim?
Often, yes, once the claim is issued and the work is certified or accepted. Funders look at the customer, the contract and whether anything is disputed.
How do retentions affect funding?
Retention money is held back until the job is complete, so it is slow cash. Some funders will advance against it later, others will not, so plan to carry it.
Do I need to finance every ute and trailer separately?
Not necessarily. Some funders can bundle several assets into one facility, which may be simpler. Ask about structure before committing.
What about sole-trader tradies?
Funders can look at bank statements, invoices and assets instead of tax returns. See the sole trader page for how it works.