Construction Finance Melbourne (2026): Stage Payments, Retentions & The “Pre-Start Gap” Checklist
Builder reviewing stage payments and retention cashflow plan on a construction site in Melbourne
🏗️ Melbourne construction · stage payments + retentions ·
Business Owners Hub · 2026
This page is not a “construction business loans 101” explainer and it’s not a general product comparison. It’s the Melbourne-specific pre-start gap playbook: how stage payments, retentions, and supplier timing create the squeeze — and what you prepare so funding doesn’t stall on Approval Criteria. (If you want the product map by job type, use: Construction Business Loans 101.)
Helpful construction reads to pair with this Melbourne guide: Progress claim cashflow · Retentions & defects liability · Civil mobilisation costs checklist · Materials deposits mistakes.
- Mobilisation + site setup (inspections, inductions, temporary services).
- Supplier deposits and early invoices driven by Trade Terms.
- Labour/subbie cash out before stage claims hit your account.
- Retention holdbacks that delay your “real” margin.
1) The Melbourne “pre-start gap” (why good builders still feel broke)
In Melbourne, the gap is rarely “lack of work” — it’s timing. You pay for mobilisation, materials, and labour first, then wait for progress claims and variations to catch up. If the job is running under a tight Cash Flow Assessment, one delayed claim can force you into panic decisions (like paying suppliers late or taking the wrong facility).
The clean way to plan it is to separate what’s a one-off project spike from your normal trading history. Lenders will still want a simple story of Trading History plus evidence that the job pipeline is real — not just optimistic forecasts.
2) Stage payments: the silent killer is the “out-of-sync” week
Stage payments look predictable on paper, but the timing rarely matches your cost curve. Your bank statements show the truth, and that’s why lenders often lean on Bank Statements to understand your “cash out first” pattern.
If you don’t map a basic buffer, you end up funding deposits with the wrong tool. A simple Cash Flow Forecast is usually enough to show where the pre-start gap sits and how quickly you normalise once claims start landing.
- Write down the first 3 stages and the “cash out” you pay before each stage.
- Mark any tax weeks (BAS/PAYG) that collide with a big supplier invoice.
- List the top 5 suppliers and whether they require deposits or COD.
3) Retentions + defects: where profit gets trapped (and why it matters to finance)
Retentions create a weird reality: the job is “done”, but the money isn’t fully released. That’s why builders often feel like they’re constantly re-funding the same growth. If retentions are heavy, you may need a facility designed to stabilise the “in between” months of Working Capital.
If you invoice into longer payment cycles (or you’re waiting on head contractor approvals), you’re effectively carrying your own receivables. That’s where a facility tied to Invoice Finance can be cleaner than trying to stretch supplier terms.
4) The approval-ready evidence pack (what stops “pending” for construction deals)
For construction, most delays come from unclear purpose or messy proof. The goal is to show the lender you’re not “plugging a hole” — you’re bridging timing. If you’re low doc, that means clean bank verification and a tight director declaration trail. Start by confirming your Low Doc lane is realistic for the request size.
Where security is involved (or higher limits), lenders may look harder at guarantees and commitments. Be ready for a Director’s Guarantee discussion and keep the story consistent with the job schedule.
- Last 6–12 months bank statements and a one-page job schedule (current + next).
- Top supplier quotes/invoices + deposit requirements.
- Proof of tax cadence (BAS/PAYG weeks) so limits match your pressure points.
- Retention terms (if applicable) and expected release dates.
5) Facility match map: which tool fits the pre-start gap (without cannibal overlap)
This is the “match the tool to the timing” section. If you want deeper product explanations, use The Business Cashflow System and ABN age & approval limits. This page stays Melbourne-construction-specific on the pre-start gap.
One more Melbourne note: if you’re targeting South East corridors, you’ll also want to compare this to the local page South East Melbourne Business Loans so Google understands each catchment.
| Cashflow problem | Clean tool | What you prepare | Fast “green flags” |
|---|---|---|---|
| Deposits + mobilisation before first claim | Business Line of Credit + (if needed) a project buffer | Job schedule + supplier deposit list + last 6–12 months statements | Clear limit use + clean repayment plan, not “mystery cash-out” |
| Short spikes around BAS/tax weeks | Working Capital Loans (short-term, predictable) | Tax cadence + cashflow map + evidence of trading stability | Defined purpose + time-bound need (not permanent overspend) |
| Waiting on head contractor approvals / long receivables | Invoice Finance (if you invoice) | Invoices + debtor info + contract/payment terms | Consistent invoicing + predictable payer behaviour |
| Plant/equipment needed for the job | Low Doc Asset Finance (separate lane) | Supplier quote + asset details + affordability story | Clear asset use + stable trading, not rushed last-minute buying |
Melbourne construction cashflow breaks at the same points: mobilisation, deposits, retentions, and the “out-of-sync” stage week. This guide is the pre-start gap checklist — not a general product explainer.
If you need the deeper product map, use: Business Loans (the hub), Business Line of Credit, Working Capital Loans 2025, and Invoice Finance 101. For builders upgrading plant, keep assets separate via Equipment Finance.
FAQ
Usually when the limit is higher, the trading story is newer, or the risk is concentrated in one big contract. Expect the lender to ask for a Borrowing Capacity narrative (how repayments stay safe even when claims land late).
Because uncontrolled usage can turn a temporary bridge into a permanent problem. If you can explain a clean Facility use pattern (deposits → mobilisation → repay at claim), approvals tend to be smoother.
The part that triggers a review if trading dips or statements show stress. That’s often tied to a Loan Covenant, so keep your facility usage aligned to the job timeline and avoid “mystery transfers”.
It can if you rack up multiple hard checks quickly. A broker-led path reduces Hard Enquiry stacking and keeps your submission consistent across lenders.
Match the facility to the job cycle, not your “best month”. If you need flexibility, compare it against an Overdraft style use case (short, controlled, repaid when claims land) rather than locking in a long commitment you don’t need.
Quick glossary references used on this page: Trade Terms · Cash Flow Forecast · Director’s Guarantee.
General info only (not financial, legal, or tax advice). For official tax guidance, start at ATO.
