Quick answer
Contract mobilisation finance is a short-term loan that covers wages, materials, equipment hire and other start-up costs between winning a contract and receiving the first payments. It suits businesses with a signed contract and a reliable payer. Size it from a week-by-week cash flow of the contract, match the term to the payment schedule including any retention, and repay from progress payments.
Key points
- The gap is the cash you spend before the contract pays — map it week by week.
- Match the loan term to the payment schedule, including retention.
- Payer reliability and contract terms matter as much as the contract value.
- Allow for claims assessed lower or paid later than the contract says.
Why do new contracts create a cash gap?
Because the work starts long before the money does. Win a sizeable contract and you may need to hire or bring on subcontractors, buy materials, hire equipment, pay insurance and set up a site — all in the first weeks. The first progress claim might not be submitted until the end of month one, assessed some time after, and paid after that.
For a growing business this is the moment cash gets tightest: the bigger the win, the deeper the gap. It’s also exactly the kind of need short-term finance is made for — temporary, specific and repaid from a documented source.
How do you size the gap?
Build a week-by-week cash flow for the contract. For each week, list:
| Money out | Money in |
|---|---|
| Wages and on-costs | Deposit or mobilisation payment, if any |
| Super (see below) | Progress payments, when actually expected |
| Subcontractors | Retention release at the end |
| Materials and freight | Variations approved and paid |
| Equipment hire | |
| Insurance, permits, site costs |
Keep a running balance. The lowest point is the size of the gap; add a margin and that’s your loan amount. The 13-week cash flow forecast guide explains how to lay this out.
Super timing is changing. The ATO confirms that from 1 July 2026, under Payday Super, contributions must be received by an employee’s fund within 7 business days after payday. For a contract with a large new crew, super now leaves the account far sooner than under quarterly payments — build that into the forecast. Our hiring ahead of revenue guide covers this in detail.
How long should the loan be?
Match the term to the payment schedule:
- When does the cumulative cash position turn positive? That’s when the loan could start being repaid.
- When will enough have come in to clear the loan in full? That’s your exit date.
- Is there retention? If a portion of each claim is held back until completion, the final repayment may depend on it — or the loan should be cleared before it.
Then add a buffer. Progress claims get assessed lower than submitted and paid later than the contract says. A 12-month loan with fair early payout often suits a contract that should wrap up in eight or nine months.
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What will a lender want to see?
- The signed contract, including payment terms, claim schedule and retention.
- Who the payer is — government body, head contractor, large corporate — and their history if you’ve worked with them before.
- Your track record on similar work.
- The cash flow forecast for the contract.
- Bank statements showing how the business normally trades.
A reliable payer and a clear schedule can make a contract a strong exit. A new head contractor with no track record and vague payment terms makes lenders cautious — and should make you cautious too.
How do you plan for claims paid late or short?
Use the payer’s real behaviour. If a head contractor’s terms say 30 days but they’ve historically paid in 45 to 60, forecast 60. If claims are regularly assessed below what’s submitted, forecast that too. business.gov.au’s guidance on payments and invoicing is useful for your own invoicing discipline, but it won’t change how a large payer behaves.
Then ask about partial repayments on the loan. If you can reduce the balance as each payment lands, the cost falls as the contract progresses. See early repayment and repaying from money owed.
One contract or a pipeline?
If this is a one-off large contract, a short-term loan with contract payments as the exit is clean and simple. If you’re winning contracts continually and each one opens a similar gap, a line of credit may be cheaper than a series of loans — see short-term loan vs line of credit.
Illustrative: mapping a contract gap
Illustrative figures only. A fit-out business wins a contract with monthly progress claims paid 30 days after each claim, and 5 per cent of each claim held as retention.
| Month | Out | In | Running position |
|---|---|---|---|
| 1 | $140,000 | $0 | –$140,000 |
| 2 | $120,000 | $0 | –$260,000 |
| 3 | $110,000 | $152,000 | –$218,000 |
| 4 | $90,000 | $171,000 | –$137,000 |
| 5 | $60,000 | $190,000 | –$7,000 |
| 6 | $20,000 | $142,500 | +$115,500 |
| Later | — | Retention release | — |
The deepest point is month two at about $260,000, so a loan of that size plus a margin covers the gap. It can be repaid from month five or six collections, leaving retention as upside rather than the exit. A 9-month term with daily accrual would give comfortable room for claims paid late.
One more practical point: keep the contract’s money separate. Running mobilisation funds and progress payments through a dedicated account makes it easy to see whether the contract is tracking to plan, stops loan money leaking into general overheads, and gives a lender a clean record if you ever need more time. It also makes the final reconciliation — and your accountant’s job at year end — much simpler.
Mobilise with the numbers in place
Start your enquiry with the contract value, payer, payment schedule and your forecast of the gap. A lending specialist will suggest a term and structure that follow the contract rather than fighting it. Enquiring won’t show on your credit file, and your details aren’t dispersed around the market. Please give accurate contract terms on the form — including retention — so the loan finishes when the contract does.
Frequently asked questions
Can I get a loan to start a new contract?
Yes. Short-term loans are often used to cover the upfront costs of a new contract. Lenders will look at the signed contract, the payer, your track record and how the loan will be repaid from contract payments.
How much should I borrow for a new contract?
Enough to cover the deepest point of the cash gap in a realistic week-by-week forecast, plus a margin — not the full contract value. Borrowing too little is a common reason businesses end up needing a second loan.
What if the client pays late?
Plan for it. Base your forecast on the client's actual payment behaviour, choose a term with a buffer, and ask about partial repayment so you can reduce the loan as each payment lands.
Should I use a line of credit instead?
If you win contracts regularly and the gaps repeat, a line of credit may fit better. For a single, larger contract with a clear payment schedule, a short-term loan is often simpler.