Every builder knows the feeling. The frame is up, the trades are paid, the timber supplier has been paid, and the frame claim is sitting with the client or the head contractor. The work’s done, but the money isn’t in the bank. Multiply that across two or three jobs and a healthy business can run short of cash while being flat out.
This guide explains where these gaps come from, how to shrink them, what security of payment laws say, and how to fund the gap when it can’t be avoided.
Key takeaways
- Cash flow gaps are a timing problem, not a profit problem. You’re usually owed the money.
- Security of payment laws in each state give you a fast process to claim and chase progress payments.
- Victoria’s rules changed from 15 April 2026, with monthly claims and payment terms capped at 20 business days.
- Unsecured cash flow loans suit tradies trading 6+ months. Property secured loans suit bigger gaps.
- Always repay the gap funding from the claim it was bridging.
Why do progress payments leave builders short?
Look at where the money goes compared with when it comes in on a typical house build.
| Stage | Money going out | When money comes in |
|---|---|---|
| Base or slab | Excavation, plumbing rough in, steel, concrete, pump hire | After the slab is poured and the claim is paid |
| Frame | Carpenters, frame and trusses, fixings | After the frame is complete and the claim is paid |
| Lock-up | Roofing, windows, brickwork or cladding, external doors | After lock-up and the claim is paid |
| Fixing | Plaster, cabinetry, internal doors, tiling, fit off | After fixing and the claim is paid |
| Practical completion | Painting, final trades, cleaning, defects | After handover, with any retention held for longer |
Every row has the same pattern: pay first, get paid later. For subbies it’s often worse, because you’re waiting on the head contractor, who may be waiting on the client or the bank.
How to work out the size of your gap
Before you borrow a dollar, get a clear number.
- List every job and its next claim. Include the amount and the realistic date you’ll be paid, not the contract date.
- List every payment due out. Wages, super, subbies, suppliers, equipment repayments, BAS.
- Map both week by week for the next 8 to 12 weeks.
- Find the lowest point. That’s your peak shortfall and the minimum you need.
- Add a buffer for a claim that runs late or a variation that isn’t signed off.
The result tells you how much to borrow and for how long. It also becomes your exit plan: the claims you’re waiting on repay the loan.
What do security of payment laws say about getting paid?
Every state and territory has security of payment laws that give contractors, subbies and suppliers a statutory right to claim progress payments. Use them. They’re often the cheapest way to shrink a gap.
New South Wales. The NSW Government’s guide to making a payment claim says payment is due to a head contractor no later than 15 business days after the claim is made, and to a subcontractor no later than 20 business days (10 business days for exempt residential work). The person you claim from has up to 10 business days to give you a payment schedule, and if they don’t give one and don’t pay, you can apply for adjudication or go to court.
Victoria. The Building and Plumbing Commission says major changes took effect from 15 April 2026. Reference dates have been replaced with a monthly entitlement to make a payment claim, claims can be made within 6 months instead of 3, and payment and release terms are capped at 20 business days. The changes apply to contracts entered into before that date too.
Queensland. Business Queensland explains that on eligible contracts, payments go through a project trust account, and retentions are held in a retention trust account.
If you’re not sure what applies to your contract, ask your lawyer or your state’s building regulator. For a deeper dive, read our guide on security of payment claims and cash flow.
Ways to shrink the gap before you borrow
- Claim the day a stage is done. A claim sent on Friday rather than the following Wednesday brings the money forward.
- Get variations signed before you do the work. Unsigned variations are the most common reason claims get disputed.
- Put your claims in the right format. Follow the contract and your state’s rules so there’s no excuse to delay.
- Negotiate supplier terms. Ask for 30 day or end of month terms so supplier bills fall after your claims.
- Chase retention. Diarise when retention is due for release and ask for it on the day.
- Don’t carry too many jobs at the same stage. Staggering starts spreads out the big outgoings.
How to fund a gap between progress payments
When the gap can’t be avoided, borrowing for a short time is often cheaper than losing trades, missing a supplier discount or stopping work.
- Unsecured cash flow loans. For tradies and builders with an ABN trading 6 months or more. Sized to turnover, based on recent business bank statements, and some are funded within hours. See cash flow loans for tradies.
- Second mortgage. For bigger gaps. Secured against equity in property you already own, no financials needed, and can fund in as little as 24 hours. In Victoria, a caveat loan may also be an option.
- Business bridging loan. When a sale or refinance is the exit.
Our progress payment gap finance page explains each option for builders, and subcontractor finance covers the subbie side.
Example: a carpentry subbie waiting on a head contractor
Example only. A two person carpentry business in Western Sydney has framed three townhouses for a head contractor. Its claim is in, but payment is weeks away and the next job starts Monday with timber to buy and wages to pay.
The business has been trading for five years with steady bank statements. An unsecured cash flow loan sized to turnover covers the timber and three weeks of wages. When the head contractor pays, the loan is repaid.
Example: a small builder with retention held
Example only. A builder in Bendigo has just handed over a duplex, but a slice of the contract sum is held as retention for the defects period, and a client on another job has fallen behind. She needs a hypothetical $180,000 for three months.
She owns her home with good equity, so a second mortgage (or a caveat loan, since the property is in Victoria) covers the gap. The retention release and the late client payment are her exit.
Key facts
- Loan size: $20,000 to $5 million
- Security: existing property you or a guarantor own, or business turnover for unsecured loans
- Speed: some unsecured loans within hours; property secured loans in as little as 24 hours
- Term: typically 1 to 12 months for property secured loans
- Suits: builders and subbies waiting on progress claims, retention or slow payers
Ready to close the gap?
Every loan is priced on your circumstances, and our lending team looks for the sharpest rate available for your situation. Start your application with our 60 second form. It won’t affect your credit score, and a lending specialist will call to tell you quickly if we can help.
