Industry guide
Business finance for construction
Builders carry the cost of labour, materials and plant hire long before a progress claim is certified and paid. Finance in this industry is mostly about closing that gap and owning the plant that keeps sites moving.
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.
A residential or commercial builder typically invoices on milestones, waits for a superintendent or client to certify the claim, then waits again for payment terms to run. Meanwhile wages are weekly, suppliers want 30 days, and 5% retention sits unpaid until practical completion and again until the defects liability period ends. That structural delay is why construction businesses with healthy profit on paper still run short of cash, and why lenders look closely at the contract mix rather than the profit line alone.
On the asset side, plant is the other half of the picture. Excavators, telehandlers, scissor lifts and site utes are all financeable against the asset itself, which means a builder with limited spare cash can still take on a bigger job. Lenders on our panel treat construction as a strong sector for asset finance and a cautious one for unsecured lending, particularly for businesses reliant on a single head contractor. Your broker will match the term to the expected life of the job pipeline, not just the machine.
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
Documents lenders usually ask construction for
- ABN, GST registration and builder licence
- 6–12 months of business bank statements
- Contract or supplier quote for the plant being financed
Finance options for construction
Equipment loan for construction
An equipment loan is the usual way a builder adds an excavator, telehandler or scissor lift without draining the cash needed to run current jobs. The machine secures the loan, so pricing sits well below unsecured money and lenders will look at older plant than they would an older car.
Chattel mortgage for construction
Most construction plant and site vehicles are financed as a chattel mortgage: your company owns the asset from day one, and if you are registered for GST you can generally claim the GST on the purchase price in the next BAS rather than spreading it across payments. Interest and depreciation are deductible where the asset is used in the business.
Unsecured business loan for construction
Unsecured lending in construction is usually about timing rather than shortfall: a claim is certified but not yet paid, and wages fall due on Thursday. A short unsecured facility repaid weekly can bridge that without tying up plant as security.
Business line of credit for construction
A line of credit fits builders with several jobs running at different stages. You draw to cover materials on the job that has just started, repay when the claim on the job nearing completion clears, and keep the limit sitting there for the next one.
Invoice finance 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.
Business vehicle finance for construction
Site utes, crew vans and supervisor vehicles are financed separately from plant, usually over four to five years with a balloon. Construction vehicles cover high kilometres and get treated roughly, so a balloon set too high can leave you owing more than the vehicle is worth at changeover.
Assets we finance for construction
Lenders active in this space
Angle Finance, Metro Finance, Flexicommercial, Banjo — among others on our panel of 18+. Your broker checks fit before anything is submitted.
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.