Moment 2 of 7
Paying for it
Where the money sits, and when it moves.
People often imagine a structured construction payment process as:
The customer pays money into an account. The builder funds the job. The customer decides later whether the builder receives anything.
That model may reduce one customer risk by transferring financing and control risk to the contractor. It is not a sound basis for many real construction projects.
The better principle is:
Protection should not starve the project of cash. Money should move according to what both sides agreed the project genuinely requires.
Guides for this moment
- For homeownersGuideBuilders are not banks. So who should fund the job?Customers are often told never to pay a builder “upfront”. Builders are then told that customer money should move only after completion of the work is approved.Read the guide
- For buildersGuideHow to structure payments without financing your customer’s projectA structured payment process will lose good trades immediately if it appears to mean: “Do the work, fund the materials and wait until the customer is satisfied.”Read the guide
- Both sidesScenarioThe £8,400 window orderNadia and Sam agree a rear extension with Harper Build. The aluminium doors and rooflights cost £8,400 and have an eight-week lead time.Read the scenario
What the words mean
- Project funding
- Project funding is the agreed structure that connects money available for the job with legitimate mobilisation, procurement and completed-work requirements. Payment actions follow the agreed milestone process through a separate regulated payment provider.
What each side does
For homeowners
Having the work done
- Understand the purpose of each payment.
- Fund the project according to the accepted structure.
- Make selections that affect procurement on time.
- Review evidence and questions against the relevant stage.
- Respond within the agreed period.
- Raise a specific query rather than withholding unrelated amounts as leverage.
For builders
Doing the work
- Propose a commercially realistic and proportionate structure.
- Explain mobilisation and procurement needs.
- Avoid artificial front-loading.
- Link payment stages to defined work or legitimate committed cost.
- Provide the agreed evidence.
- Record variations and funding effects before changed work where practicable.
- Stop accumulated exposure when a required funding or response state is not met, in accordance with the agreement.