Won the contract? Fast funding to mobilise before the first payment

Why does winning a contract create a cash crunch?

Because you pay to start it long before you’re paid for doing it. A new contract usually means hiring or redeploying crews, buying materials, hiring or buying plant, taking out extra insurance and sometimes paying a bank guarantee or security deposit. Then you work for weeks before the first payment claim, and the client takes its usual time to pay.

The bigger the contract relative to your business, the deeper that hole. It’s one of the most common reasons growing businesses come looking for fast funding, and it’s a good problem to have, provided you fund it properly.

How do I size the mobilisation gap?

List every cost from day one until the first payment actually lands, not just until you submit the claim:

Cost	When it hits
Wages and super for the crew	Every pay run from start
Materials and supplies	Before or at start
Plant hire or purchase	Start
Insurances, inductions, licences	Before start
Subcontractors	Their own payment terms
Security deposit or bank guarantee	Before start, if required

Subtract what you can commit from cash on hand and add a buffer for late payment. The Cash Gap Calculator helps. If the contract includes retention, remember a slice of every payment will be held back.

Which funding route fits?

• One big contract: a lump-sum loan sized to the gap. Unsecured for smaller amounts; property-secured for larger ones.
• Ongoing contract work: a line of credit you draw as each job starts and repay as payments land.
• Equipment needed for the job: see fast equipment finance.

With property security, $20k to $250k is possible on the same day, and up to $5m within 24 to 48 hours.

What do lenders want to see?

The signed contract, or at least the letter of award, is gold. It shows the work is real and how the loan will be repaid. Lenders will also want the payment schedule, your recent bank statements and an idea of your track record with similar work.

Illustrative example: a commercial painting firm in Darwin wins a $1.1 million school refurbishment. It needs to add eight painters and buy $90,000 of materials, and the first progress payment will arrive about seven weeks after starting. The mobilisation gap is roughly $250,000. The owners have equity in their home, and a second mortgage could fund it quickly, repaid as progress payments arrive.

What are the risks?

Late payment, disputed claims and variations that take time to approve. Build in slack, and don’t borrow on the assumption that every claim will be paid on day one of the payment terms. Read the contract’s payment clauses carefully. If anything in the contract looks one-sided, small business unfair contract term protections may be relevant, and your adviser can tell you more.

How do I avoid the same crunch next time?

Negotiate a mobilisation payment or deposit on bigger contracts. Submit claims promptly and accurately. Keep a line of credit in place so the next contract doesn’t need a fresh application. Our guide on cash flow when you win a big contract has a full checklist.

Just signed? Start your 60-second enquiry and get mobilisation funding moving.

What about bank guarantees and security deposits?

Some contracts, particularly with government, councils and large head contractors, require a bank guarantee or cash security before work starts. A bank guarantee usually ties up cash or a facility with your bank for the life of the contract. A cash security deposit leaves the business account for months. Either can be a large, early hit to working capital. Factor it into your mobilisation gap from the outset, and ask the client whether the security reduces as milestones are met.

Insurance and compliance costs

Bigger contracts often require higher levels of public liability or professional indemnity insurance, additional workers compensation cover, site inductions and specific licences or accreditations. These costs land before the first day on site. Get quotes early so they’re in your cash plan rather than surprising you in week one.

Labour hire and subcontractors

If you’re bringing in labour hire or subcontractors to resource the job, check their payment terms. Some want weekly payment, which can widen your gap if the client pays monthly. Negotiating terms that line up with your payment cycle can reduce how much you need to borrow.

See if your new contract can be funded from day one

There’s no credit check when you first enquire, so you can ask with nothing to lose. We won’t pass your details around a crowd of lenders. A real person reads your enquiry, looks at the contract and the gap before payment, and calls with the quickest way to get you started.

Please give the real contract value, the gap you need covered and your state on the form so we can match you properly the first time. Check if you qualify.