Won a big contract? Funding the mobilisation before the first payment

Why can winning work feel like a cash crisis?

Because big contracts are paid in arrears. A client agrees to pay monthly progress claims, 30 or 45 days after each claim. Meanwhile, you need materials on site in week one, extra staff from day one and perhaps a new vehicle or machine. Insurance and permits have to be in place before you start.

Add it up and a business can be 60 to 90 days into a contract — and deep into its cash — before the first dollar arrives. Plenty of businesses have turned down work they could do well purely because they couldn’t fund the start.

Map the cash before you sign

Before committing, build a simple week-by-week schedule:

Week	Cash out	Cash in	Running position
1	Materials, site set-up, insurance	—	Sharply negative
2–4	Wages, more materials	—	Still falling
5	Wages	—	Lowest point
6–8	Wages	First progress payment	Recovering
9+	Ongoing	Regular payments	Positive, if margins hold

The lowest point is the number to fund, plus a buffer. Retentions held back by the client, slow approvals of claims and variations disputed by the client can all push that lowest point deeper.

Which capital sources fit contract work?

• Invoice finance — once you’re invoicing, advances against each invoice keep wages and suppliers paid. Scales with the contract.
• Equipment finance — new plant, vehicles or tools needed for the job, secured on the assets.
• Line of credit — absorbs the swings between claims.
• Second mortgage or caveat loan — for the upfront mobilisation, especially when the start date is close.

A common pattern is property-secured capital for the first few weeks, then invoice finance once billing is under way, with the property loan repaid from the first payments.

How fast can mobilisation capital land?

• Property-secured, $20k to $250k — same day possible
• Property-secured, larger amounts — up to $5m possible within 24–48 hours
• Smaller unsecured amounts — same-day funding possible
• Invoice and equipment finance — set-up typically takes days (general market guide)

If your start date is a week away, don’t wait to set up a full invoice facility. Bridge first, structure second.

What lenders want to see

• the signed contract, or a letter of award
• the client’s payment terms and claim schedule
• your mobilisation budget and cash flow forecast
• evidence you’ve delivered similar work before
• recent bank statements and existing commitments

A signed contract with a reliable client is one of the strongest pieces of evidence you can bring. It tells the lender exactly where repayment comes from.

An illustrative example

A commercial painting company wins a $900,000 contract to repaint a hospital, paid monthly on 30-day terms. Mobilisation needs $140,000 of paint, scaffolding hire and six extra painters for the first five weeks. A caveat loan over a director’s investment property funds the start the same day. Once the first claim is approved, an invoice finance facility takes over, and the caveat loan is repaid from the second progress payment. (Illustrative only.)

Starting soon? Tell us the contract value and start date.

Before you sign the contract

• Ask for a mobilisation payment or deposit
• Negotiate shorter payment terms if you can
• Clarify retentions and how variations are approved
• Check the client’s payment history with other contractors
• Make sure the margin covers the cost of finance

Retentions and how they stretch cash

In construction and some service contracts, the client holds back a portion of each payment — a retention — until practical completion or the end of a defects period. Retentions can tie up a significant amount for a long time. When modelling a contract:

• treat retentions as money you won’t see for months
• don’t count them as working capital
• check the contract’s terms for when and how they’re released
• know your rights under your state’s security of payment and retention rules

Retentions are one of the reasons construction businesses often need more working capital than their margins suggest. Our cash conversion cycle by industry guide covers construction cash patterns.

Government and large-corporate clients

Government agencies and large corporates often pay reliably, but on their own schedule, with formal approval processes for each claim. That reliability makes their invoices attractive to invoice financiers. It also means:

• invoices must match purchase orders and contract references exactly
• claims may need sign-off from a site representative before they’re paid
• payment runs happen on set days; missing one can add weeks

Learn the client’s process early — who approves, what they need and when payment runs happen.

Insurance, bonds and guarantees

Larger contracts often require insurances, performance bonds or bank guarantees before work starts. These can tie up cash or security on top of mobilisation costs. Include them in your budget from the beginning, and ask your specialist whether any of the capital you’re arranging can be used to support them.

Ready to say yes to the big job?

The right contract can lift your business to a new level, as long as you can afford to start it. Finding out what’s possible doesn’t involve a credit check, and your details aren’t sent to a long list of lenders — a real person looks at the contract and your timing and calls you back. Give us accurate details of the contract, start date and what the business can offer, and we’ll tell you what can land in time. See if your business qualifies.