Getting paid on time as a building materials supplier

Trade credit is the quiet engine of residential construction. You supply materials now and get paid later, which lets the builder start a job before the owner's money has come in. It is good for your sales and good for the relationship, and it is also a loan from you to the builder with the risk sitting on your side of the ledger.

The trouble is the same timing problem that runs through the whole industry. The builder pays you out of progress payments that arrive in stages, weeks apart, into a general account that is also paying subcontractors, wages, and older debts. When a progress payment runs late, the builder reaches into that account and pays whatever is most urgent. Your 30 day invoice that is not threatening to stop deliveries is rarely top of the list.

Around one in eight small construction businesses are more than 60 days overdue on payments to suppliers, according to industry credit data. That is not a few bad actors. It is the system working the way it normally works.

When a builder becomes insolvent, suppliers join owners and subcontractors on the unsecured creditor list. A 2024 UNSW analysis made the point that construction is unusually unprotected here: a solicitor must hold client money in trust, a bank deposit is guaranteed, but money owed by a builder sits behind the banks, the employees, and the tax office. You recover whatever is left, which in residential insolvencies is often cents in the dollar, twelve to twenty-four months later. Our guide on what happens if a builder goes broke walks through how that process runs.

Here is something worth knowing, because it cuts both ways. When a supplier withdraws a builder's credit and switches them to cash on delivery, everyone else reads it as a warning sign that the builder is failing. Owners are told to watch for exactly that. So your credit decision is not just protecting you, it is information the whole market acts on. That gives you more leverage than most suppliers use. A builder who wants to keep their account terms with you has a reason to keep you paid.

Before anything clever, get the ordinary credit controls right, because most supplier losses come from skipping them.

Credit check builders before you extend terms, and re-check the bigger accounts periodically rather than once at signup. Set credit limits that reflect what you can afford to lose, not what the builder wants. Invoice the day the materials go out, not at month end, and chase early and politely rather than waiting until an account is badly overdue. The debts that get recovered are the recent, well documented ones. The ones that drag are the old, vague ones.

If you supply materials on credit, the Personal Property Securities Register is the tool most suited to your position, and many suppliers under-use it. Registering a security interest over goods you have supplied, or a purchase money security interest where it applies, can lift you above the unsecured creditors if a builder fails, so you are not at the very back of the queue. The rules are specific and the timing matters, so it is worth getting proper advice on setting it up correctly for how you trade.

The controls above reduce your risk. The structural fix is to be paid out of money that is already committed to the job, rather than out of whatever is left in the builder's account at month end.

That is what changes on a BuildFair project. The owner's funds for the build sit in regulated custody with the banking partner Kobble, which operates under AFSL 545391 (Yondr Money Pty Ltd), in a ringfenced account for that project. BuildFair holds the verification and the release authority, Kobble holds the cash. A supplier invoice for that project can be settled from those committed funds on verified progress, rather than competing with every other thing the builder owes across every other job. In practice a builder can route the relevant invoices through the project so settlement comes from money already set aside, which means you are paid from the build's own funds, not from the builder's general cashflow position that week. How the money is held is set out on our Trust & Security page.

For larger suppliers, this is also the cleanest way to keep selling to builders without carrying the full credit risk of each one. You keep the account and the volume, and the payment comes from a structure built to pay it. If you run a trade account programme and want to understand how this could work alongside it, that is a conversation worth having directly.

Being straight about scope, this does not change what a builder ordered or whether a delivery was correct, and it is not credit insurance. It changes where the money for the job sits and where your payment comes from.