Won a big contract? Funding the ramp-up in three steps

Why can good news create a cash problem?

You’ve won the contract. It’s bigger than anything you’ve done before. Then the maths sinks in: you need extra staff from week one, materials ordered in advance, maybe a new vehicle or machine, and the customer pays 30 or 60 days after your first invoice. For the first couple of months, the contract costs money rather than making it.

This is one of the most common “before you know you need finance” moments. Owners search for things like “how to fund a big job” or “can’t afford to start a contract”, and the answer is almost always a timing plan plus the right mix of finance.

Step one: how do I map the cash timeline?

Take a sheet of paper or a spreadsheet and plot, week by week:

• When costs begin: hiring, training, materials, equipment, insurance
• When you’ll invoice: on milestones, monthly, or on completion
• When payment actually lands: invoice date plus the customer’s payment terms
• Your existing commitments: so the new contract doesn’t starve other work

The lowest point on that timeline is your funding need. Business.gov.au’s guide to managing cash flow recommends exactly this kind of planning, along with clear payment terms.

Step two: what am I actually funding?

Split the need into three buckets, because each suits a different tool:

Bucket	Examples	Often funded by
Equipment and vehicles	A truck, a machine, tools	Equipment finance
Working capital	Wages, super, materials, subcontractors	Line of credit, cash flow loan or invoice finance
One-off setup	Fitout, licences, recruitment, training	Unsecured or property-secured loan

Don’t forget the people costs. Under Payday Super, the ATO says super of 12% of qualifying earnings must reach each employee’s fund within 7 business days of payday, unless a longer period applies. New hires add wages and super to every pay run from the start. Our page on hiring staff and Payday Super covers that ramp-up.

Step three: which tools fit which bucket?

• Equipment: asset finance, where the equipment is the security. Match the term to how long you’ll use it, including after the contract.
• Working capital: a line of credit you draw as costs land and repay as payments arrive, or a cash flow loan, typically $5,000 to $500,000 sized on turnover.
• Supplier payments for a confirmed order: purchase order finance.
• Waiting on invoices: invoice finance to unlock them as soon as they’re issued.
• Bigger or more complex needs: property-secured lending from $20,000 to $5,000,000.

Want a specialist to help split your contract into the right pieces? Send a 60-second enquiry. There’s no credit check to ask.

What should I check in the contract?

Before you sign, look closely at:

• Payment terms: how long, and what triggers each payment
• Retentions: amounts held back until completion or the end of a defects period
• Variations: how extra work is approved and paid
• Penalties: for delays or performance issues
• Termination: what happens to your costs if the contract ends early

Each of these affects your cash timeline. If you can negotiate a deposit, milestone payments or shorter terms, do it before you sign, not after.

An illustrative example

Illustrative only. A civil contractor wins a two-year council maintenance contract. It needs an extra truck and a small excavator, three new staff, and materials for the first month. The council pays monthly, 30 days after invoice. The contractor’s timeline shows costs starting six weeks before the first payment. It funds the truck and excavator through equipment finance over terms matching their useful life, sets up a line of credit for wages and materials, and uses its existing cash only as a buffer. By month four, the line of credit is being cleared every month as council payments arrive.

What if the contract ends or is cancelled?

It’s not pleasant to think about at the moment of winning, but planning for the end of a contract protects the business:

• Match finance terms to the contract term where you can, so you’re not still repaying equipment years after the work has finished, unless you’ll keep using it.
• Read the termination clauses to understand what you’re owed if the client ends the contract early.
• Avoid over-hiring permanently for work that may not last; casual or fixed-term arrangements can provide flexibility.
• Keep other customers warm, so the business isn’t dependent on a single contract.

Lenders appreciate seeing that you’ve considered these risks. It shows the contract is an opportunity you’re managing, not a bet you’re hoping pays off.

If equipment is a big part of the need, our equipment finance page explains how to match terms to useful life. For the cash gap while you wait for payment, see invoice finance.

Turn the win into a smooth start

Winning a big contract should be a turning point for your business, not a cash flow crisis. A clear timeline and the right mix of finance make the difference.

When you enquire, nothing touches your credit file. A real person reads your situation and calls you, and your details aren’t fired off to a long list of lenders. Please be accurate on the form about the contract size, your turnover and the timing of payments, so we can match each part of your need on the first call. Fund your new contract.