Episode 19 - Your Builder Is Being Paid to Pay You in Arrears

What if paying a fee to get your progress claim sooner is actually helping your builder pay you later?

In this episode of The Subbies Toolbox Podcast, Michelle Cirson takes a closer look at early payment platforms being used in commercial construction and the questions Australian subcontractors should be asking before signing up.

Michelle explains what she has seen through contract reviews and what Subbies Toolbox members have experienced when using these payment arrangements. She unpacks the potential risks sitting behind what can look like a handy cashflow solution, including: guarantees, payment timeframes, and the possibility of builders benefiting financially from the arrangement.

In this episode, you'll learn:

How early payment platforms can work when you're waiting for a builder to pay

What can happen if the builder goes broke before the financier gets paid

The personal risk that can sit inside Director's Guarantees

How payment terms can interact with Security of Payment timeframes

What to consider before giving up part of your progress claim to get paid sooner

How better payment terms and accounts receivable systems could help protect your cashflow

There can be a genuine commercial reason to use early payment finance. The important bit is knowing what you've signed up to, what it's costing you and who else benefits from the arrangement.

If you're an Australian subcontractor working in Commercial Construction, this episode will give you plenty to think about before you automatically click the early payment option.