Progress Claim Cashflow for Small Builders: Cashflow Finance Around Stage Payments

Progress claim cashflow finance for small builders – Switchboard Finance

Insights · Small builders & tradies

For: Small builders & resi crews

Progress claims · Stage payments

Progress Claim Cashflow for Small Builders: LOC, WCL & Invoice Finance Around Stage Payments

Progress claims on paper, weekly costs in real life.

Small builders live on stage payments, but suppliers, wages and subbies want money every week. This guide shows how to wrap a simple Cashflow plan around progress claims using a business line of credit, working capital loans and invoice finance so the job keeps moving even when clients are slow.

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Stage	Money out this stage	Progress claim due	Gap without finance
Base	Excavation, concrete, steel	Base claim lodged on pour	7–21 days waiting on client payment
Frame	Frame timber, carpenters, crane	Frame claim after inspection	Another 7–21 days, bills still due weekly
Lock-up	Windows, doors, roofing, subbies	Lock-up claim as envelope closes	Multiple claims sitting as Accounts Receivable
The goal: use simple facilities so you’re not personally funding these gaps from your own pocket.

Real example: A three-town builder had four houses on the go and over $300k sitting in unpaid progress claims. Suppliers and wages were on weekly terms, so every delay came straight out of the director’s pocket until a cashflow plan was put around the work.

Why progress claims still choke small builder cashflow

On paper, progress claims should keep the job self-funding. In reality, clients pay late, inspections get pushed and one slow payer can jam up the whole month. Meanwhile, concrete, timber and wages don’t wait.

It’s the same pattern we see in 5 Cash Flow Warning Signs Your Business Needs a Finance Safety Net and Business Loans for Tradies: building jobs look profitable on the spreadsheet but starve the business in the middle.

• Multiple jobs at lock-up with unpaid claims.
• Subbies chasing payment while you wait on the client.
• Directors tipping in personal savings to bridge gaps.

Real example: A small builder had three jobs all sitting at frame and lock-up with delayed claims. Once they mapped it out, they realised they weren’t bad at building — they were just constantly funding everyone else’s timelines.

Three tools to sit behind your stage payments

You don’t need a dozen products — just a simple mix of a Business Line of Credit, Working Capital loan and Invoice Finance that matches how you run jobs. Each solves a different part of the gap between progress claims and weekly bills.

It’s the same trio we unpack in the Business Cashflow System, Business Finance Safety Net and Low Doc Cashflow Path.

Tool 1

Line of credit for weekly costs

A revolving LOC sits behind day-to-day spend — fuel, small supplier bills, urgent repairs — and gets cleared when progress claims land.

Tool 2

Working capital loan for known gaps

A short-term lump sum covers a tight stretch, like three houses hitting frame at once, then gets paid down over the next few stages.

Tool 3

Invoice finance for big claims

Selected progress claims can be advanced so you aren’t waiting weeks on a single large payment that’s holding up the whole programme.

Real example: One builder put a modest LOC in place for weekly bills, then used invoice finance only on two large claims a year. It was enough to stop the constant “juggle and hope” cycle without over-complicating their setup.

Setting limits and drawdowns around your jobs

Instead of guessing, we map your next three to six months of work and set a sensible Credit Limit and term that match your job flow. The aim is a facility that feels boring and predictable, not huge and stressful.

This matches how we structure the cashflow trio on the Business Line of Credit, Working Capital Loans and Invoice Finance service pages.

How a simple facility works

• LOC sits just big enough to cover 4–6 weeks of fixed site costs.
• Short-term Facility covers any one-off squeeze.
• You only tap the LOC when needed, not every small expense.

How repayments cycle

• Draw a Drawdown when a stage needs extra cash.
• Clear it when the related progress claim lands.
• Keep limits free so the next job has room as well.

Real example: A crew doing four-townhouse builds used a single LOC with a preset limit tied to their average month. Whenever a stage payment landed, the first step was to clear the LOC balance — not just let it drift up and up.

When invoice finance makes sense for builders

Invoice finance isn’t just for big factories. For the right builder, selectively advancing a couple of chunky stage claims each year can be cleaner than trying to push every client onto tighter terms.

If you want the deep dive, we cover this in Invoice Finance 101 and Invoice Finance vs Business Line of Credit.

Invoice finance can fit when:

• You have a few large, reliable clients with clear contracts.
• One or two big claims are tying up a lot of margin.
• You’d rather get paid on time than fight over terms.

LOC/WCL is usually enough when:

• Jobs are smaller and more frequent.
• Most clients pay fairly reliably, just not instantly.
• You want a simple setup backed by low doc approvals.

Real example: A builder working mainly for one developer started advancing just the final completion claims. It turned a 45-day wait into a 2–3 day wait and removed the constant stress at the end of each build.

Summary · Progress claim cashflow

Build with confidence instead of bankrolling every stage yourself

Progress claims don’t automatically protect your cash — a simple plan around LOC, WCL and invoice finance does. If you’re juggling multiple jobs, start with the frameworks in our Business Cashflow System, 7 Business Costs You Can Finance and the Low Doc Cashflow Path.

Quick example: One small builder used these tools to move from “hoping” clients paid on time to a predictable setup tied into the Tradie Hub and Business Owners Finance Hub pathways — without changing their core work.

See Business Loan & Cashflow Options Map Your Progress Claim Cashflow

Progress claim cashflow — FAQs for small builders

Can I set up these facilities on a Low Doc Loan basis?

In many cases, yes. If your business is strong but paperwork is messy, a well-structured Low Doc Loan or low doc cashflow facility can work, especially when we can clearly tie limits to your job pipeline.

What paperwork do lenders usually want for builder cashflow?

Most lenders will want recent Bank Statements, a basic job list and a quick overview of how you manage subs and suppliers, not a 50-page business plan.

Should I build a cash flow forecast before applying?

A simple Cash Flow Forecast showing your next few months of stage payments and costs can make it much easier to pick the right mix of LOC, WCL and invoice finance. You can work through this with your accountant and cross-check it against the ATO’s small business cash flow resources at ato.gov.au.

Will this help with subbies and supplier payments too?

Yes. A good setup makes it easier to stay on top of Accounts Payable so you keep your best subbies and suppliers close, even when one big client drags their feet.

How long do I need to have been trading before this makes sense?

Most small builders get the best results once they’ve got at least a year or two of solid Trading History and a repeat pattern of similar jobs — exactly the scenario we cover in our business loan and tradie cashflow content.

This article is general information only and doesn’t take into account your specific circumstances. Always speak with your accountant or adviser before making finance decisions.