How Does Progress Claim Finance Work for Builders?
Construction Finance
Progress claims · Security of payment · Invoice finance
You have done the work, issued the claim and still have wages, super and suppliers to pay before the head contractor pays you. This guide explains which progress claims can be funded, how the funder works out the eligible amount, what happens if the claim is cut or not paid, when finance stops being the first problem to solve, and what to have ready before you call.
Quick Answer
Progress claim finance lets a builder or subcontractor bring forward cash against an eligible progress claim before the head contractor or principal pays. It is specialist invoice finance, not a construction loan drawdown. The funder usually works from the eligible claim value rather than the face value: retention, disputed variations, set-offs, concentration limits and a payment schedule that cuts the claim can all reduce what is available. If the claim becomes disputed or the payer does not pay, the finance documents decide who carries the shortfall, so ask about recourse before you sign.
Also called: progress claim funding, construction invoice finance, contract finance, or progress payment finance. It is not the progress drawdown a construction lender releases to a property owner.
What is progress claim finance, and how is it different from a construction loan drawdown?
Progress claim finance funds the contractor against a progress claim it has already issued, so the business is paid before the head contractor or principal pays. It is not the drawdown a construction lender releases to a property owner as a build reaches each stage; that is the owner's loan, and it sits on the other side of the same project.
It belongs to the invoice finance family. business.gov.au describes invoice finance as finance based on the strength of a business's accounts receivable. Here the receivable is a progress claim under a construction contract, and products vary from funder to funder. For the wider product, see how invoice finance works in Australia.
A progress claim is not quite an ordinary invoice. It values part of the work at a stage rather than goods already delivered; the amount can be cut by a payment schedule, a set-off or a disputed variation; and the head contractor may hold back retention from it. Those three differences are why funders treat claims more carefully.
If you are the property owner or developer and want the lender's side of a staged build, see how progress drawdowns work on a construction loan.
| Question | Progress claim finance | Construction loan drawdown |
|---|---|---|
| Who is borrowing? | The builder, subcontractor or construction business | The property owner, developer or borrower under the construction facility |
| What supports the payment? | An eligible receivable or progress claim | The construction loan facility, build progress and lender approval |
| Why is the money released? | To bring forward cash while the payer has not yet paid the claim | To fund the project as an approved construction stage is reached |
| Who ultimately pays? | The head contractor or principal pays the claim | The construction lender advances under the owner's facility |
| Main underwriting question | Is the claim eligible, collectible and assignable, and who owes it? | Is the build on budget, at the right stage and within the lender's approved facility? |
Sources: business.gov.au, Key financial terms (no update date shown). Read 2 October 2026. A general definition; products vary.
Is your progress claim likely to be fundable?
A claim is most fundable when it is certified or covered by a payment schedule, owed by an established payer, free of disputed variations and assignable under the head contract. The more of the checks below land in the more fundable column, the more funders will look at it; the more land in the harder to fund column, the more likely a single invoice deal, a line of credit or a property-backed bridge suits better.
| Check | More fundable | Harder to fund |
|---|---|---|
| Certification | Certified, or a payment schedule accepts the amount | Not yet certified, or the schedule cuts the amount |
| Who owes the money | An established head contractor or a government-backed principal | A small, new or slow-paying builder |
| Variations | Approved in writing before the work was done | Agreed verbally, or disputed |
| Assignment | The head contract allows the debt to be assigned | A non-assignment clause |
| Ledger spread | Claims spread across several payers | Most of the ledger owed by one payer |
| Volume | A steady run of claims | A single one-off claim |
| Tax position | ATO lodgements up to date, any tax debt on a payment plan | Lodgements behind, or tax debt not disclosed |
Can an uncertified or disputed progress claim be financed?
Sometimes, but an uncertified or disputed claim is materially harder to finance than an amount that has been certified or accepted in a payment schedule. The funder needs evidence that the amount is likely to become a collectible receivable, so it will look at the contract, work completed, variation approvals, certification process, payment schedule and the payer's history before deciding what, if anything, is eligible.
| Claim status | What it usually means for finance | What to have ready |
|---|---|---|
| Certified or scheduled in full | Strongest starting point because the payer has accepted the amount | Claim, certificate or payment schedule, contract and ledger |
| Payment schedule accepts part | The accepted amount may be assessed separately from the disputed balance | Payment schedule and reasons for the reduction |
| Awaiting certification | Harder because the payable amount is not yet settled | Evidence of work completed and the certification timetable |
| Unapproved variation | Harder because entitlement and value may still be contested | Variation notices, emails, site records and contractual approval trail |
| Formally disputed amount | Usually treated as a dispute first rather than a normal receivable | Payment schedule, contract, legal advice and any adjudication timetable |
| Retention only | Commonly excluded or discounted because release is deferred | Retention clause, completion status and expected release date |
A useful dividing line: finance can bridge the timing of an amount likely to be paid; it does not make a disputed entitlement disappear. If the payment schedule says the payer does not owe the amount, protect the contractual and security of payment position before assuming a funder will advance against it.
Basis: Switchboard broker explanation for both tables, not a cited statistic, a lender's policy or an approval rule. Security of payment rights and deadlines depend on the state and the contract. October 2026.
Not sure where your claim lands? Check your eligibility before you approach a funder.
How much of a progress claim can you borrow against?
There is no single Australian advance rate for progress claims. A funder usually works from the eligible claim value, not simply the face value printed on the claim. Retention, disputed variations, set-offs, amounts rejected in a payment schedule and debtor concentration limits can all reduce the amount on which the advance is calculated.
A subcontractor issues a $120,000 progress claim. The payment schedule accepts $96,000, including $4,800 that will be held as retention. The starting point for the finance assessment is not automatically $120,000. The funder first works out the eligible claim value after the payment schedule, retention and any other exclusions, then applies its approved advance rate to that eligible amount.
Illustrative only. It is not a quote, an advance-rate promise or an indication that the claim will be approved.
Simple way to think about it: face value of claim minus retention, disputed or rejected amounts and other ineligible amounts equals the eligible claim value. The funder's approved advance rate is then applied to that eligible value. Ask the funder to show you both numbers separately so you can compare offers properly.
This distinction matters when you are sizing payroll or supplier cover. A $120,000 claim is not necessarily $120,000 of finance capacity, and the amount available can change if a payment schedule arrives before the advance is made.
Basis: Switchboard broker explanation. Advance rates and eligibility vary by funder and file; no universal percentage is stated.
Why do most invoice financiers exclude or restrict progress claims?
Because the amount owed on a progress claim is less certain than on an ordinary invoice, claims are funded less often, and on harder terms. Many invoice finance facilities exclude progress claims outright, and those that accept them usually advance a smaller share and watch the ledger more closely.
| Question | Ordinary invoice | Progress claim |
|---|---|---|
| What has been delivered | Goods delivered or services completed | Part of the work, valued at a stage |
| Who agrees the amount | Usually reflects an agreed sale or completed service, although it can still be disputed or credited | Can be reduced by a payment schedule, set-off, back-charges or a disputed variation |
| Retention | Not usually held | Often withheld until completion or the end of the defects period |
| Can the debt be assigned? | Usually | Check the head contract for a non-assignment clause |
| Payment clock | Trade terms | The contract, within the state security of payment Act |
| Share a funder advances | Higher | Usually lower than for an ordinary invoice |
| Who funds it | Most invoice financiers | A smaller group of specialist funders |
Basis: Switchboard broker explanation, not a cited statistic. October 2026.
The value can be disputed. A claim states what the contractor says the work is worth, or how far it is complete. The head contractor can value it lower, and variations that were never approved in writing are a common reason a claim gets cut.
The payer can deduct. Set-off, back-charges and liquidated damages can all come off a claim before it is paid, so the funder may receive less than the face value it advanced against.
The contract may block assignment. Some head contracts include a non-assignment clause that can stop the claim being assigned to a funder at all. Whether yours does, and what it means, is a question for a construction lawyer.
Funders also look hard at concentration. A builder whose claims sit with one or two head contractors carries more risk on a single payer than a business with a broad spread of customers, and a concentrated ledger rules many construction files out. For how funders cap that exposure, see how a debtor concentration limit works, or talk to us about invoice finance for your business.
How does a progress claim finance facility work, from claim to payment?
A claim facility follows the claim from issue to payment in six steps, with the funder sitting between the claim and the cash:
- Issue the claim. Complete the stage and issue the progress claim under the contract.
- Certification or schedule. The claim is certified, or the head contractor serves a payment schedule.
- Submit to the funder. The contractor submits the claim, with the certificate or schedule, to the funder.
- The advance. The funder advances part of the claim value; the share is its advance rate, which varies by funder and by file.
- The head contractor pays. Payment goes into a controlled account where the facility requires it.
- The balance comes back. The funder takes its advance and fees, and releases the balance, less any retention still held.
A plastering subcontractor has a certified claim of $84,000 sitting inside the payment term while its fortnightly wages fall due. The funder advances part of the claim. When the head contractor pays into the controlled account, the funder takes its advance and fees and the subcontractor receives the balance, less the retention the head contractor is still holding.
Illustrative and composite. Not an offer or a prediction of approval.
Where a claim facility fits among a construction business's other options depends on its size and age; see construction finance by business stage.
What does the funder check before advancing on a progress claim?
Expect the funder to underwrite the payer as much as the claimant. The head contractor's ability and habit of paying matters as much as your own business. A funder will usually look at:
- who the head contractor or principal is, and how it pays;
- the head contract's claim, certification, set-off and assignment clauses;
- whether the claim is certified or covered by a payment schedule;
- how much of the ledger sits with one payer;
- whether retention is held;
- the business's own trading history and any tax debt;
- what happens if a funded claim later becomes disputed or ineligible, including whether the facility is recourse and how a shortfall is handled;
- how the funder will take security, which can include a notice of assignment to the head contractor and a registration on the Personal Property Securities Register. Under section 12 of the Personal Property Securities Act 2009, "Meaning of security interest", the interest of a transferee under a transfer of an account is a security interest. Registration questions belong with a lawyer.
How that security is documented also matters for your rights under security of payment law, covered below. For the ledger side of the same assessment, see what lenders read in your debtor book; if only one claim needs funding, funding a single invoice may be simpler.
Sources: Personal Property Securities Act 2009 (Cth), section 12, latest compilation. Read 2 October 2026.
Will the head contractor know you have financed the claim?
Often, but not always. In a disclosed facility the head contractor or principal is notified and normally pays a nominated or controlled account. A confidential facility can leave collection with the contractor, but availability depends on the funder, the business and the ledger. Ask which structure is being proposed before you sign, because it affects customer communication and how payments are controlled.
A notice of assignment is a routine part of invoice finance: the payer's obligation is to pay the nominated account, not to approve your finance. The wording of the notice matters more than the fact of it, because of the NSW decision in the next section. Ask the funder how and when the notice will be given, and have your lawyer read it before it goes on a claim.
Basis: Switchboard broker explanation, not a cited statistic or a lender's policy. October 2026.
What happens if the head contractor does not pay after the claim is funded?
Do not assume that financing a claim transfers every non-payment risk to the funder. The facility documents decide what happens if the payer pays late, disputes the debt, reduces it, becomes insolvent or never pays. Before signing, ask whether the facility is recourse, when a funded claim becomes ineligible and whether a shortfall can be taken from later collections or has to be repaid another way.
| What happened? | Finance question | Other issue to protect |
|---|---|---|
| The payer is simply late | How long can the claim remain outstanding before fees, eligibility or recourse change? | Diary the statutory and contractual payment dates |
| The payment schedule cuts the claim | Does the advance now relate only to the accepted amount, and how is the shortfall handled? | Protect adjudication or other recovery rights on the disputed balance |
| A variation is rejected | Is that part of the receivable now ineligible? | Preserve the variation evidence and contractual claim |
| The head contractor disputes the whole claim | What does the facility require you to do with the funded amount? | Treat it as a construction payment dispute, not just a cash-flow delay |
| The payer becomes insolvent | Who carries the bad-debt exposure under the finance documents? | Get legal and insolvency advice promptly and preserve any statutory rights |
What does recourse mean on a funded progress claim?
In practical terms, recourse asks whether the construction business still has to make the funder whole if an advanced claim is not collected or becomes ineligible. The answer varies by facility. Do not compare two offers only by the advance rate: compare the recourse provisions, dispute treatment, concentration limits, minimum terms, control account, security and what happens to an overdue claim. A PPSR registration protects the funder's position against your other creditors if your business becomes insolvent; it does not decide who carries a shortfall on a funded claim. The facility terms do.
Sources: Australian Financial Security Authority, PPSR, Why register on the PPSR? and Which security interest has priority? (no update dates shown). Read 2 October 2026.
What if the payment schedule arrives after the funder has advanced?
Tell the funder immediately and send the payment schedule. A reduction can change the eligible value of the receivable and create a shortfall between what was advanced and what the payer now says it will pay. At the same time, diary the security of payment deadline for the disputed amount. The funding issue and the payment dispute need to be managed together, but they are not the same problem.
Basis: Switchboard broker explanation for facility mechanics; legal rights and insolvency consequences depend on the contract, facility and jurisdiction. Get construction-law advice for a disputed claim.
How does security of payment law affect a progress claim you have financed?
Security of payment law gives the right to claim a progress payment to the contractor who did the work, so how a funder takes the claim matters. In NSW, the Court of Appeal quashed an adjudication determination where the subcontractor's invoices recorded that the underlying debts had been assigned to a financier. The 2-1 majority reasoned that once a claim carrying the assignment notice reached the head contractor, the subcontractor had itself said it was no longer the creditor, so it could not use the Act to recover that debt. Check with the funder and a construction lawyer before an assignment notice goes on a payment claim.
That was one NSW decision on its facts, and other states' Acts differ, but it shows why the wording on a funded claim matters. The Acts give the right to claim progress payments to the person who carried out the work or supplied the goods or services; in NSW, a contractor keeps that right even where the contract says it cannot claim progress payments. Each Act caps how long payment can take, and in Victoria a respondent that does not serve a payment schedule in time can become liable for the full amount claimed. Victoria's reformed regime applies to all construction contracts, including those entered into before 15 April 2026.
Sources: Quickway Constructions Pty Ltd v Electrical Energy Pty Ltd [2017] NSWCA 337, NSW Caselaw, decided 18 December 2017; Piper Alderman, Security of payment and factoring: not so fast (20 December 2017). Noted 2 October 2026. One NSW decision on its facts; how the facility is documented matters; ask a construction lawyer.
| State | Who can make the claim | Payment schedule | Longest payment term allowed | Retention trust rule |
|---|---|---|---|---|
| New South Wales | The contractor who did the work, even if the contract says it cannot claim progress payments | Within 10 business days after the claim is made | Principal to head contractor 15 business days; head contractor to subcontractor 20 business days (non-residential) or 10 business days (residential); the contract can set a shorter time | Head contractors hold retention in trust on projects valued over $20 million |
| Victoria | The person who carried out the work or supplied the goods or services | Within 10 business days, or the contract's shorter time, or the full amount claimed becomes payable | 20 business days; 22 December to 10 January excluded; applies to all construction contracts from 15 April 2026 | See the regulator |
| Queensland | The contractor; a subcontractor chooses a subcontractor's charge or adjudication, not both | Within 15 business days after the claim is given, or the contract's shorter time | Subcontract 25 business days; commercial building contract 15 business days; 10 business days if the contract states no due date | A project trust account for each eligible contract; one retention trust account can serve many projects |
| Western Australia | Contractors and subcontractors, with a right to a progress payment at least monthly | Within 15 business days of receiving the claim, or the contract's shorter time | Principal to head contractor 20 business days; head contractor to subcontractor 25 business days; residential work by the contract's due date, or 10 business days if none is stated | Withheld retention held on trust; account opened within 10 business days; contracts of $20,000 or more (including GST) since 1 February 2024 |
| SA, Tasmania, ACT, NT | Each has its own Act | SA 15 business days; ACT 10; Tasmania 10 (20 for some residential work); the NT uses its own payment dispute process | SA 15 business days; ACT 15; Tasmania 10 (20 for some residential work); NT 20 working days after the payment schedule | See the regulator |
Sources: NSW Government, About Security of Payment (updated 28 September 2026), Making a payment claim (updated 24 March 2026) and Retention money held by head contractors (updated 26 August 2025); Building and Plumbing Commission, Changes affecting construction contracts, Changes to the SOP scheme and Security of payment FAQ (each updated 30 June 2026); QBCC, Request payment and Respond to payment request (each updated 31 August 2021) and Trust accounts (updated 31 August 2021); Business Queensland, Payments in the building industry (updated 24 June 2026); Small Business Development Corporation WA, How WA's new Security of Payment Act will help subcontractors get paid (1 February 2024) and Making a claim under the Security of Payment Act (9 April 2025); Merlehan Group, Security of Payment Table (May 2026), an industry comparison, for the WA head contract term and the SA, Tasmania, ACT and NT schedule deadlines and payment terms; WA Government, Retention trust scheme fact sheet (October 2024). All read 2 October 2026. Each state's rules apply only to contracts in that state; check the regulator for current limits.
Does each state handle a funded claim the same way?
No. Each state and territory runs its own scheme. In Queensland, a subcontractor who is short-paid chooses between a subcontractor's charge and adjudication; it cannot use both. South Australia, Tasmania and the ACT each have a Building and Construction Industry Security of Payment Act 2009, and the Northern Territory has its Construction Contracts (Security of Payments) Act 2004, each with its own time limits. For what those differences mean for your finance, see how construction rules by state affect your finance. If you are the owner funding the build rather than the contractor, the drawdown side is in our progress claims and drawdowns guide.
Sources: Small Business Commissioner SA, Who the SBC helps: construction (updated 22 June 2026); Tasmanian Government, Disputes: security of payment (updated 4 March 2020); ACT Legislation Register, Building and Construction Industry (Security of Payment) Act 2009 (republished 6 December 2025); NT Legislation, Construction Contracts (Security of Payments) Act 2004 (in force at 25 May 2024). All read 2 October 2026.
A civil contractor has about half its ledger owed by one head contractor. The funder caps its exposure to that head contractor, so only part of those claims can be funded. Before signing, the contractor's lawyer checks how the assignment notice will be given, so that it does not compromise the contractor's right to adjudicate a short payment.
Illustrative and composite. Not an offer or a prediction of approval.
What happens to retention money when you finance your progress claims?
Funders generally do not advance against retention, because it is held back until completion or the end of the defects period. The balance a funder releases is paid less any retention still held.
Where that money sits while it is held depends on the state. In NSW, head contractors on projects valued over $20 million hold retention in a trust account, and where a project reaches that value only after the head contract is signed, the rule covers contracts entered into after the threshold is reached. Queensland uses retention trust accounts, and one account can serve many projects, subject to its own eligibility rules. In WA, a party that withholds retention holds it on trust for contracts of $20,000 or more (including GST) entered into since 1 February 2024; the scheme is not retrospective. The sources are listed under the state table above.
For when retention money is released and how builders bridge that gap, see our retention and defects liability guide.
Is a head contractor's application read differently from a subcontractor's?
Yes. The funder is reading a different payer in each case, so the same claim facility looks at a different file.
| What the funder reads | Head contractor file | Subcontractor file |
|---|---|---|
| Who owes the claims | A principal or developer | A head contractor |
| Claim pattern | Larger and fewer claims | More claims spread across jobs |
| Payer risk weighed | The principal, and the head contract's own security terms | The head contractor's payment record and tier |
| Retention | Held under the head contract's terms | Held by the head contractor |
| Downstream obligations | Its own payment obligations to subcontractors | Mainly its own wages and suppliers |
Basis: Switchboard broker explanation, not a cited statistic. October 2026.
Funders often prefer claims on larger, established head contractors and government-backed principals. A subcontractor working under a head contractor is only as fundable as the business it bills. For the wider picture, see our construction finance guide and the finance map for subcontractors, builders and civil firms.
From the broker's desk, indicative
Based on Switchboard broking experience with construction and trade business files, as of October 2026.
- What stops a claim facility is rarely the builder's credit score. It is the paper behind the claim.
- Funders look first at who owes the money, then at the contract: how claims are certified, what can be set off, how much retention sits behind each claim.
- Builders who keep their claims, payment schedules and variation approvals in order usually have more options. Builders whose claims are routinely cut or disputed usually have fewer, whichever funder they try.
General information from broking experience as at October 2026. Not a quote, an offer or a prediction of approval.
A claim is late or short-paid this week: what should you do first?
Protect the claim first, then fund the gap. Security of payment deadlines are short and finance takes time to arrange, so diary the dates before you talk to a funder. In order:
- Read the payment schedule. Note the amount scheduled, the reasons for any cut and the date it was served. In NSW and Victoria a schedule is due within 10 business days, and in Queensland and WA within 15, unless the contract sets a shorter time; a schedule that never arrived can change your rights.
- Diary the adjudication deadline. It runs in business days from the schedule or the due date, and differs by state (see the table below). Call a construction lawyer or the state regulator the same day.
- Split the undisputed amount from the disputed amount. Funders work from what the payer has scheduled, not the face value of your claim.
- Size the real gap. Add up the wages, super, supplier accounts and BAS that fall due before the payment date.
- Match the gap to the tool. A facility suits a steady run of claims; a single invoice deal or a line of credit suits one gap; a property-backed bridge suits a larger amount when there is equity.
- Hold the assignment wording. Do not put a funder's notice on a payment claim until your lawyer and the funder have agreed the wording.
| Situation | First problem to solve | Finance may still help with |
|---|---|---|
| Certified or accepted claim, still inside payment terms | Cash-flow timing | Wages, super and suppliers while you wait |
| Payment schedule accepts most of the claim | Separate accepted and disputed amounts | The accepted portion, subject to funder policy |
| Claim cut because a variation is disputed | Contract and security of payment position | The separate cash gap, not necessarily the disputed variation |
| No schedule and payment is overdue | Protect statutory recovery rights immediately | Short-term cash while recovery runs |
| Set-off, back-charge or liquidated damages asserted | Work out whether and how the deduction can be challenged | Only the eligible, collectible part of the ledger |
| Accepted claim but payroll is due earlier | Cash-flow timing | This is the cleanest use case for receivables finance |
| State | After a payment schedule for less than you claimed | If no payment schedule was served |
|---|---|---|
| New South Wales | 10 business days after receiving the schedule; 20 business days after the due date if the scheduled amount is not paid | Give notice of intention within 20 business days of the due date; the respondent then has 5 business days; apply within 10 business days after that |
| Victoria | 10 business days after the schedule | 10 business days after the 5 business day notice period ends |
| Queensland | 30 business days after the schedule is given; 20 business days after the due date if the scheduled amount is not paid | 30 business days after the later of the due date or the last day a schedule could have been given |
| Western Australia | 20 business days after receiving the schedule or the due date | 20 business days, after a 5 business day notice period |
| South Australia | 15 business days after the schedule | A notice of intention step first; check the regulator |
| Tasmania and the ACT | 10 business days after receiving the schedule | 10 business days after the 5 business day notice period ends |
| Northern Territory | 65 working days after a payment dispute arises | 65 working days after a payment dispute arises |
Sources: NSW Government, Applying for adjudication (updated 26 August 2025); QBCC, Business days and the holiday period (published 28 November 2025) and Apply for adjudication (updated 1 July 2025); Merlehan Group, Security of Payment Table (May 2026), for the other states. All read 2 October 2026. An industry comparison for states other than NSW and Queensland; confirm your deadline with the regulator or a lawyer.
Two more dates matter. Most Acts let an unpaid claimant suspend work after written notice, usually 2 business days (3 in Victoria and the NT), but suspending carries its own risks under the contract, so get advice first. And Victoria and Queensland do not count 22 December to 10 January as business days, so a deadline that starts in December can run well into January.
This is general information, not legal advice. For the bridge options, see a caveat loan for a claim gap or a second mortgage for a claim gap.
Who qualifies for progress claim finance, and what works below the minimum?
If your claims are steady and owed by creditworthy payers, a claim facility can suit you. Smaller or one-off needs are often better met another way, because a facility takes time and paperwork to set up and carries ongoing fees.
| Option | What it funds | Security | Best when | Read more |
|---|---|---|---|---|
| Single or selective invoice finance | One invoice or a chosen few | The invoice | A one-off slow payer | Single invoice finance guide |
| Business line of credit | A revolving limit for timing gaps | Varies | Repeated short gaps | Business lines of credit |
| Working capital loan | A lump sum over a term | Varies | A defined cash need | Working capital loans |
| Caveat loan | A short-paid or late claim, fast | Property | A short bridge to a known payment | Caveat loans |
| Second mortgage | A larger or longer claim gap | Property behind the first lender | A longer gap with equity available | Second mortgage loans |
Basis: Switchboard broker explanation, not a cited statistic. October 2026.
A small residential builder has one short-paid claim and no ongoing run of claims. Setting up a claim facility is not worth it for a single gap. The builder covers the shortfall with a business line of credit, or a short caveat loan against property, and repays it when the claim is paid.
Illustrative and composite. Not an offer or a prediction of approval.
For how smaller builders weigh these options against each other, see progress claim cash flow for small builders, and for how a lender reads claims on a larger job, how a lender reads progress claims on a unit build. If you are not sure which side of that line your claims fall on, ask us whether your claims could be funded.
What does progress claim finance cost, and what should you ask before signing?
Progress claim finance is priced as fees on the advance and on the facility, not as the per-draw inspection fee a construction loan charges. Pricing varies by funder and by file. Expect some or all of:
- an establishment fee;
- a discount or service fee on each advance;
- any facility or line fee;
- legal costs and PPSR registration costs;
- adjustments when a claim is paid early or late.
Be cautious with any offer that names a fixed advance or a funding time before the funder has read your contract and payment schedule: the paper behind the claim decides both. Compare the total cost with the alternatives in the table above before you commit, and weigh it against what a late claim already costs you in supplier terms, overtime you cannot run, or work you have to turn down. For how the two most common choices stack up, see invoice finance against a working capital loan, or compare funding your invoices and claims with us.
| Ask this | Why it matters |
|---|---|
| What exactly is the advance calculated on? | Face value, scheduled amount and eligible amount can be different numbers |
| Is the facility recourse? | You need to know who carries a shortfall if the payer disputes or does not pay |
| What happens when a claim becomes overdue or disputed? | Fees, eligibility and repayment obligations can change |
| Are retention and unapproved variations excluded? | They can materially reduce usable finance capacity |
| What debtor concentration limit applies? | A strong ledger can still be constrained if one head contractor owes most of it |
| Will the head contractor be notified? | It affects customer communication and the payment account |
| What security and PPSR registrations are taken? | You should understand the security package, not just the headline fee |
| What are all establishment, service, legal, line and exit costs? | Total cost matters more than a single quoted fee |
What should you have ready, and what happens when you contact Switchboard?
Have the claim, the contract and your payment record ready, and the first conversation can be about options rather than paperwork. Switchboard brokers business-purpose finance for self-employed business owners and ABN holders. Gather:
- the progress claim, and any certificate or payment schedule that answers it;
- the head contract or subcontract, including its payment, set-off, retention and assignment clauses;
- written approvals for any variations in the claim;
- your aged receivables and payables;
- recent BAS and an ATO account statement;
- recent financial statements or management accounts;
- if property might be used as security, its address and the current loan balance.
What happens next:
- A short call. We ask about the claim, who owes it and the date you need the money.
- A read of the paper. We go through the contract terms and the ledger with you, and flag anything a construction lawyer should check.
- A match. We match the need to a claim facility, a single invoice deal, a line of credit or a property-backed bridge.
- The funder's terms. The funder makes its own assessment and sets its terms; you see the costs before you commit.
- Your decision. You decide whether to go ahead. No approval or timeframe is guaranteed.
Have a claim waiting on a head contractor? Send us the claim amount, the payer and the date you need the money. More guides for builders and trades sit in our Construction Hub.
Progress claim finance can bring forward cash against an eligible progress claim before the head contractor pays, but the usable amount can be much lower than the claim face value once retention, disputed variations, payment schedules and concentration limits are allowed for. Funders read the payer and the head contract as closely as your business, and financing the claim does not remove the need to protect security of payment rights if the amount is cut or not paid.
Key takeaway: Separate the accepted amount from the disputed amount, size the cash gap from the eligible receivable rather than the claim face value, ask who carries the shortfall if the debtor does not pay, and protect your security of payment dates before finance paperwork changes the claim.Frequently asked questions
Sometimes, but it is harder than funding a certified or accepted amount. The funder will usually want evidence of the work completed, the contract, the certification process, any payment schedule and variation approvals before deciding whether any part of the claim is eligible.
There is no single Australian advance rate. The funder usually calculates an eligible claim value after allowing for retention, disputed or rejected amounts, set-offs and concentration limits, then applies its approved advance rate to that eligible amount.
Split the accepted amount from the disputed balance. A funder may assess the accepted amount separately, while the disputed amount may need to be protected through the contract and the applicable security of payment process.
The finance documents decide what happens next. Ask whether the facility is recourse, when an overdue or disputed claim becomes ineligible, and whether a shortfall must be repaid or can be recovered from later collections. Protect any construction payment rights at the same time.
Often, but not always. A disclosed facility normally notifies the payer and directs payment to a nominated or controlled account. Confidential facilities exist, but availability depends on the funder, the business and the ledger.
A disputed or unapproved variation is generally harder to fund than an accepted amount because entitlement and value are not settled. Keep the variation notices, approvals, emails and site records, and deal with the contractual or security of payment issue as well as the cash gap.
Funders commonly exclude or discount retention because the money is not due for release until the contract's completion or defects conditions are met. The treatment depends on the facility and the contract.
No more than 25 business days after the payment claim on a Queensland subcontract, and the contract can set a shorter time. If the contract states no due date, payment is due 10 business days after the claim is given, and the respondent must give a payment schedule within 15 business days or pay in full. See the state comparison table.
Read the payment schedule, diary the security of payment deadline, separate the accepted and disputed amounts, and size the cash gap. Protect the claim before assuming finance can solve the disputed amount.
In NSW a payment claim must be in writing, state the amount claimed and describe the construction work or related goods and services it covers. If the contract sets no date, a claim can be made on the last day of each month, one claim per date, and NSW Government guidance says a subcontractor on residential work must state that the claim is made under the Building and Construction Industry Security of Payment Act 1999. If your claims are financed, read the caution on assignment wording.
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