Won a big contract? How to keep cash flowing until it pays

Why can a great contract hurt cash flow?

It’s one of business’s cruel ironies. You win the biggest job you’ve ever had, and within a month you’re shorter of cash than you’ve ever been. Nothing has gone wrong. The contract is profitable. The client is solid. But you’ve paid for crews, materials, equipment and insurances for weeks, and the first payment is still weeks away.

The bigger the contract relative to your normal turnover, the deeper this gap. A contract worth twice your usual monthly revenue can easily need more working capital than the business has ever held.

Step 1: map the cash cycle

Lay out every week from signing to the first payment landing in your account, and beyond to when cash recovers.

Week	Cash out	Cash in
0	Insurances, inductions, deposits on materials	—
1–4	Wages and super each pay run, materials, plant hire	—
4	Submit first progress claim	—
5–8	Wages, materials, subcontractors	—
8	—	First payment, less any retention
9+	Ongoing costs	Regular payments

This is illustrative. Your contract will have its own rhythm. Under payday super, from 1 July 2026, super goes out with every pay run, so include it weekly or fortnightly.

Step 2: find the deepest point

Add your existing cash and other income to the map. The week where your running balance is lowest is your gap. The Cash Gap Calculator gives a quick version; a spreadsheet gives the full picture.

Step 3: shrink the gap before you fund it

• Ask for a deposit or mobilisation payment. Many clients will agree on larger contracts, especially if you explain the upfront costs.
• Negotiate payment terms. Fortnightly claims instead of monthly can cut the gap substantially.
• Claim promptly and accurately. A claim submitted three days late is paid three days late.
• Talk to suppliers. Longer terms on materials for this job can match your payment cycle.
• Stage hiring. Bring crews on as the work ramps up rather than all at once.

Step 4: fund what’s left

Situation	Route	Speed possible
One big contract, trading business	Short-term cash-flow loan	Same day for smaller amounts
Ongoing contract work	Line of credit	Immediate once set up
Large gap, property available	Caveat or second mortgage	Same day for $20k–$250k
Very large gap	Property-secured loan	Up to $5m in 24–48h
New equipment for the job	Equipment finance	Same day possible

Read more about funding a new contract.

Illustrative example: a security services company in Melbourne wins a contract to staff three shopping centres, adding 22 guards. Wages and super rise by about $45,000 a fortnight, while the client pays monthly, 30 days after invoice. The gap peaks at around $160,000 in week seven. The owners negotiate fortnightly invoicing, which cuts the peak, then set up a property-secured facility over their home for the rest.

Step 5: protect yourself from the risks

• Late payment. Build in a buffer of a few weeks. Don’t assume every claim is paid on day one of the terms.
• Disputed variations. Get variations approved in writing before doing the work.
• Retention. Track it and chase its release on time.
• Contract terms. If something looks one-sided, get advice. Small business unfair contract term protections may apply.
• Concentration. If this client becomes most of your revenue, plan for what happens if they slow down.

What lenders want to see

The signed contract or letter of award, the payment schedule, your recent bank statements and a brief summary of your track record with similar work. A simple cash-flow map like the one above makes a strong impression, because it shows you understand the gap and have a plan to close it.

Common mistakes to avoid

• Underestimating how long the first payment will take
• Forgetting super, insurance and inductions in the early weeks
• Funding the gap with tax money
• Borrowing far more than the gap for far longer than needed
• Taking on two big contracts at once without funding either

Growth without the squeeze

Winning bigger work is how businesses grow. Funding it properly is how they survive the growth. Map the cycle, shrink the gap, and fund what’s left before it becomes urgent.

A cash plan template you can copy

Set up a simple spreadsheet with one row per week for the life of the contract plus a few weeks after. Use these columns:

• Week number and date
• Wages and super for the contract crew
• Materials and supplies
• Plant hire or equipment repayments
• Subcontractor payments
• Insurances, licences and other fixed costs
• Claims submitted
• Payments expected (after retention)
• Net cash for the week
• Running balance

Fill it in before you sign if you can, and update it every week. The running balance column tells you when the gap peaks, how deep it goes and when it closes. It’s also the single most useful document to show a lender.

Questions to ask the client before signing

• Will you pay a deposit or mobilisation payment?
• How often can we claim, and how quickly do you pay approved claims?
• How much retention is held, and when is it released?
• How are variations approved and paid?
• Is any security or bank guarantee required?

The answers shape the size of your gap. Even small improvements, such as fortnightly instead of monthly claims, can make a big difference.

Saying no, or not yet

Sometimes the right answer is to decline a contract, or to negotiate a smaller first stage, if the cash gap is more than the business can safely fund. Growth that breaks the business isn’t growth. A specialist can tell you honestly how much funding is realistic, which helps you decide how big a contract you can take on.

Keep the rest of the business funded too

It’s easy to focus every dollar on the new contract and let existing customers, maintenance and tax slip. Make sure your cash plan covers the whole business, not just the shiny new job, so growth doesn’t come at the expense of what already works.

Just signed? Let’s fund the gap

A short enquiry takes about a minute. There’s no credit check when you first enquire, so it won’t affect your file, and we keep your details with our team rather than sending them to a crowd of lenders. A real person reads your enquiry, looks at the contract and your cash cycle, and calls you with the quickest way to keep cash flowing until the payments arrive.

Please put the contract value, the gap you’ve worked out and any property you own on the form, so we can match you properly the first time. See if you qualify.