Invoice Finance for the Civil Construction Industry

With record government investment in the civil and construction industry, there has never been a better time for SMEs to make the most of such lucrative opportunities. However, the rewards that come from taking on big business contracts are not without risk. 

In Illion’s latest Late Payment Analysis from December 2020, it stated that Australian businesses in the construction sector have seen their payment times steadily worsening since April 2020. 

This is where invoice finance comes in. Also known as debtor finance, accounts receivable finance or cash flow finance, it is an alternative finance solution that is reliable, flexible and secure for SMEs working with big business in the construction sector. 

When businesses can regulate their cash flow easily, it allows the business to operate much more securely and effectively, without the stress that comes from the financial burden of waiting for invoices to be paid.


As a result of the pandemic, both the Federal and State Governments have boosted infrastructure spending to assist with the economic recovery. The additional funding has been significant – $66.9 billion is set to be spent on infrastructure in the 2020-21 financial year alone, which is a big increase from the original budget of $53.3 billion, pre-pandemic. 

This budget is also allocated to a range of smaller projects including transport and public housing, along with school and hospital upgrades across the country. The state with the biggest budget allocated is New South Wales.

Further, the recent release of Infrastructure Australia’s Infrastructure Priority List for 2021, highlighted huge opportunities in the infrastructure sector. According to the list, there are 44 new infrastructure proposals with a project pipeline of $59 billion. 180 projects and initiatives make up the list, with a record number of new projects making it to the list this year.


Landing a big client or securing a large, long-term contract is an exciting milestone for any SME business in the civil and construction industry. Tendering can be a long road and almost always means extra work and pressure.

The benefits however, can be felt in business transformation, growth and greater financial security. These can include:

– Increased revenue – winning a large contract can be highly lucrative for SMEs meaning more money in the bank

– Regular cash flow – typically, contracts are longer-term and deliver steadier cash flow and increased business stability

– Opportunities for growth – greater certainty around revenue can allow for opportunities to grow your business

– Greater credibility – landing a large, well-established client can change perceptions of your own business as well as raise your profile in the market

– Networking opportunities – working for large businesses and organisations can lead to opportunities to selling to other divisions, suppliers or secure new contracts

While there are many benefits for SMEs that come with winning large infrastructure contracts, the risks should also be considered before tendering for such projects. These include:

– Dependency – losing a large client or contract can leave a huge hole in your revenue and in some cases an abrupt cessation of works can lead to the insolvency of your business

– Demanding and slow – big projects mean larger budgets, with greater deliverables and expectations. There may also be many layers of process and approvals that can slow down work, and potentially impact payment times

– One-sided price negotiation – if you become too reliant on a large client you may not have enough bargaining power when it comes to negotiating on price, payment times or fees

– Late payments – larger clients may take a long time to pay your invoices, something that will almost certainly lead to cash flow issues for your business (particularly if you are carrying the costs of your suppliers, warehousing etc.)

– Increased costs – if you are required to upscale your business in order to deliver to your large client e.g. extra staff, equipment, subcontractors, you may experience higher costs and cash flow problems

– Stress – meeting the needs of a potentially demanding, powerful larger client can lead to more stress for you and your business (especially if you are also meeting the demands of existing clients and employees)

It’s crucial for businesses in the civil and construction industry to weigh up the potential risks and rewards before taking on big contracts.


For businesses in the infrastructure sector who struggle with delayed payment terms, invoice finance allows businesses to get their money back into their business faster to manage outgoing expenses and avoid taking on any unnecessary debt. 

Alternative finance options like invoice finance, allow SMEs to fully finance their operations, while also ensuring the reliability of revenues. It simultaneously insulates them from the impacts of sudden changes and market forces (ie. a global pandemic).

The biggest criticism of the different cash flow finance models are the very stringent contracts that providers place companies under. However, Apricity Finance offers invoice finance ‘at call’ for your clients, known as selective invoice finance. This means businesses get the flexibility to choose which invoices to fund, when, and at what percentage without being charged when not in use.

A selective invoice finance facility provides working capital as and when it’s needed, closes the gap between the time they need to make purchases, hire equipment, take on subcontractors, and when they’re paid.


Preparation is key for SMEs, they need to educate themselves on what comes with winning big contracts and be aware of the resources that are at hand. Plus, they need to ensure they can cope with the various strains that come with small business; cash flow, working capital, and increased workforce among others.

Opportunities for growth are often few and far between, and almost always include elements of risk for the smaller operator. Apricity Finance can help guide you on harnessing the benefits and avoiding the pitfalls that can come in the civil and infrastructure industry. To help prepare for the process and learn more about invoice finance, read our eBook here.


If you need advice for your business if you work in the civil and construction sector, speak to a trusted adviser on how to stay on top of cash flow. Seeking trusted advice from experts on the tender process can help your business be prepared. 

Want to learn more about how invoice can help your construction business? Talk to one of our team today, visit our website here. For information about invoice finance and more on Apricity Finance, visit here.