Progress payments leave a gap, so how do you fund it?

Staged payments sound fair on paper. You do a chunk of work, you claim for it, you get paid. In real life the sequence runs the other way round: you pay the supplier on Friday, the crew on Thursday, and the claim for that stage clears sometime after it has been checked, approved and processed.

The space between those events is what this page is about.

Why do progress payments create a cash gap at all?

A claim measures work already done. It cannot arrive before the work, and it cannot arrive before someone has checked it. So every stage carries a built-in delay, and your costs do not wait.

Three things stretch that delay:

• Front-loaded costs. Materials and hire hit early in a stage.
• Approval time. Someone has to inspect, certify or sign off before money moves.
• Processing time. Even an approved claim joins a payment run.

Add retention on top and you have money that is earned but deliberately not yet payable.

How does retention make the gap longer?

Retention is the part of each payment the head contractor holds back until later, usually until practical completion or the end of a defects period. If your contract holds some back, you carry that sum for the life of the job and beyond.

Here is why it surprises people. Your margin on a job might be thin, and the retained amount can be larger than your profit. You have done the work, covered the cost, and still cannot touch part of the payment.

Check your contract for what is held, when it is released, and whether any is released at an earlier milestone. If you are unsure how a particular builder handles it, ask before signing rather than after.

What does a progress gap look like with real numbers?

Here is a deliberately simple, illustrative example. It is not a real job.

Stage	Costs paid during stage	Claim value	Claim paid
Stage one	$12,000	$20,000	Three weeks after stage ends
Stage two	$15,000	$25,000	Three weeks after stage ends
Final	$6,000	$15,000	Four weeks after completion

Notice that during stage two you are still waiting on stage one’s claim while spending fresh money on stage two. At the worst point the business has funded two stages at once, which can be a lot of cash for a small operation. Stage one’s profit has not landed, and stage two’s costs are climbing.

That overlap is the real gap. Plot it on a calendar rather than in a total, and you can see the exact week the account runs dry. The cash flow gap planner does this in a few minutes.

How can I shrink the gap before borrowing a cent?

Plenty can be done at the contract and admin level.

1. Ask for an early materials claim. If a stage needs a big supplier order, request a deposit or early claim to cover it.
2. Split stages. Smaller stages mean smaller claims and faster approvals.
3. Document as you go. Photos, timesheets and variation approvals saved during the stage make the claim bullet-proof.
4. Claim promptly. Send it the day the stage finishes.
5. Open supplier terms. A trade account with a supplier moves some of the cost from the start of the stage to the end of the month. See materials supplier accounts for how that works.

These changes are free, and they often remove half the problem.

When does funding make sense for a progress gap?

When the gap is real, short and well documented. A bridge works best when you can say: the claim is for this amount, it is due about this date, and here is the contract that proves it.

The sensible options are:

• A short-term loan sized to the shortfall and repaid when the claim lands. Details are in short-term loans for tradies.
• A line of credit you draw on during a stage and clear after payment. See line of credit for tradies.
• Wages-specific funding if the crew is your main outlay. Our wages finance page covers that.

Unsecured amounts for trading businesses typically run from $5k to $500k, sized on turnover and bank statements. If you own property, secured loans from $20k to $5m widen the range.

If you would like a person to look at your stage schedule and suggest a fit, start your enquiry here.

Putting it together on your next job

Before you accept a job, run three quick checks. First, when does cash go out compared with when claims come in? Second, how much is held in retention, and for how long? Third, how reliable is the payer?

If the answers show a gap you cannot carry on your own, you can line up the bridge before the stage starts rather than scrambling in the middle. That is far calmer than asking for help in the week the account hits zero.

Want to know what you could access?

You do not need to be in crisis to find out what is possible, and there is no credit check just for enquiring, so it will not mark your file. We keep your details with us rather than passing them around a pile of lenders, so you will not get a wave of calls. A real person reads your situation, including your stage schedule if you want to mention it, and rings you back.

One request: fill the form in as accurately as you can. Real turnover and a realistic picture of what is owed lets us point you at the right option on the first try.

Get your funding options →