Invoice finance · Construction
Invoice finance for construction
Construction finance is business lending structured around progress claims, retentions and plant purchases, covering equipment loans for machinery and working capital for the gap between paying subbies and being paid.
How invoice finance works for construction
Invoice finance suits construction subcontractors invoicing head contractors and developers on standard commercial terms. The facility advances a portion of each approved claim, so labour and materials are covered the same week the claim is lodged rather than 45 days later. Progress claims are harder to fund than plain trade invoices because of certification, variations and retention, so not every lender will touch them. Those on our panel that do will usually exclude the retention portion and want to see a clean payment history with the debtor.
The cash-flow pattern we plan around
Milestone claims certified and paid 30–60 days in arrears, with 5% retention held until practical completion and the end of defects liability.
What construction typically fund
- Excavators, telehandlers and site plant
- Utes and site vehicles
- Wages and materials between progress claims
- Retentions tied up until practical completion
- Bonding and insurance premiums
Invoice finance for construction: the numbers
| Typical amounts | $20,000 – $5,000,000 |
|---|---|
| Term | 1–12 months |
| Indicative rates | 8% – 18% p.a. |
| Repayments | Settled when the customer pays each invoice |
| Speed | 24–48 hours per invoice once set up |
| Documents construction usually need | ABN, GST registration and builder licence · 6–12 months of business bank statements · Contract or supplier quote for the plant being financed |
Rates are indicative, change without notice and depend on the lender, product, asset, term and your credit profile at the time of application. They are not an offer of finance. Comparison rates, where shown, are true only for the example given.
Key terms
Construction equipment finance
Construction equipment finance is secured lending used to buy excavators, loaders, telehandlers and other plant, where the machine itself is the security and the term is typically 3–7 years with an optional balloon.
Progress-claim cash flow
Progress-claim cash flow is the gap between paying wages, subcontractors and suppliers on a construction job and receiving certified payment for that stage of work, commonly 30–60 days plus retention.
What is invoice finance?
Invoice finance (also called debtor finance or receivables finance) advances a percentage of an unpaid invoice’s value now, with the remainder paid when the customer settles, minus the financier’s fees.
Invoice finance vs invoice factoring
Factoring sells the invoice to the financier who collects from your customer; invoice discounting keeps collections with you and is usually confidential. Both are forms of invoice finance.
Questions from construction
How do builders fund the gap between paying subbies and progress claims being paid?
Most builders use a line of credit or invoice finance against certified progress claims, so wages, subcontractors and materials are covered while the claim sits 30 to 60 days in arrears. Invoice finance advances up to 80 to 90 per cent of a certified claim within a day or two; a line of credit is drawn as needed and repaid as claims land. Both are structured around the payment terms in your contracts.
Can a construction business finance plant and vehicles without financials?
Yes. Builders with two years of ABN history and clean credit are commonly approved for utes, trucks, excavators and site equipment on low documentation up to around $150,000 to $250,000, often within 24 hours. Larger plant and businesses under two years need financials or a deposit. Lyft Money checks fit across the panel before anything is submitted.
Can retentions be financed?
Retentions themselves are rarely financed directly because they are contingent, but a working capital facility sized to your typical retention exposure covers the cash they tie up until practical completion and the end of defects liability. Some invoice financiers will consider retention releases as receivables once they are certified. Your broker structures the facility around your contract terms.
What do lenders look for in a construction business?
Consistent claim income in the bank statements, a work-in-hand schedule or signed contracts, builder’s licence and insurances, tax up to date and a clean credit file. Lenders are cautious about the industry, so a broker who presents the pipeline and margins clearly makes a real difference to approval and pricing.