Finance for trades and construction businesses
What you can access depends less on your industry label and more on how certain a lender can be about when you’ll get paid next.
General information only
Construction finance isn’t one thing. A civil contractor building a Sydney tunnel, a residential builder running three jobs at once, and a tradie doing project-based work all present completely different files to a lender, and they get assessed differently.
Every lender is trying to answer the same question, though: if they can’t work out when you’re going to be paid, and what new work is starting when your current contract ends, how are they meant to feel confident you can pay them back?
Civil construction: the closest thing to certainty in this space
Think tunnel systems, freeways, government-backed infrastructure work. Civil has boomed over the last ten years on the back of government projects. In lending circles, contracts like these get called gold-brick income, because the payer and the payment schedule are about as predictable as it gets. That certainty makes a civil contractor’s application straightforward across most products, from asset finance for plant and equipment to larger working capital facilities.
Residential construction: asset finance is easy, cashflow products are the hard part
Smaller residential builders can usually still get asset finance without much friction. It’s secured against the vehicle or equipment itself, so the lender’s risk is contained either way. Cashflow products (unsecured loans, overdrafts, lines of credit) are a different story. If income is lumpy, which is common when you’re waiting on staged payments across a handful of jobs, that unpredictability is what makes a lender hesitate on a facility that isn’t secured against a specific asset.
Trades: the most consistent income profile in construction
Trades work is normally more project-based than civil or residential builds, but the income tends to be more consistent. One job finishes and the next is usually already lined up. That consistency is what helps trades businesses get across the line on a wider range of products than residential builders often can. New utes, tools and supplier purchases are what we see most, almost always financed through asset finance rather than a cashflow product.
Income certainty: high
Government-backed contracts and predictable payment schedules make most products straightforward, including larger working capital facilities.
Income certainty: variable
Asset finance is usually easy. Unsecured loans, overdrafts and lines of credit get harder to place if income across jobs is lumpy or irregular.
Income certainty: consistent
Project-based but steady, one job typically lines up behind the next. Utes, tools and supplier purchases are the most common asset finance use cases.
Not your industry label, not your revenue on paper, but whether a lender can work out when you’re getting paid next and what work replaces the contract you’re finishing now.
Why documentation matters more in construction than most industries
In this sector, how organised your paperwork is separates an easy application from a hard one. Signed contracts, a clear pipeline of what’s next, staged payment schedules, and evidence of the pattern behind your income, not just the number. Turning up with bank statements alone and no context is where residential builders and smaller operators most often get stuck.
We’ll often ask for more information than the lender strictly needs. That’s deliberate. Understanding your full position lets us plan for the next contract, not just this one. If you’re happy for us to, we’ll also work with your accountant. We’d rather line up with the strategy they’ve been building, like tidying up the financials, than push against it. And nobody wants the accountant finding out about a new loan at the end of the financial year.
Share of all business failures nationally that were construction, more than any other single industry.
Sourced data: Scale Suite
Why are lenders extra cautious in construction right now?
Construction accounted for more external administrators’ reports nationally than any other industry in 2023-24, and ASIC’s own series shows how steep the climb was: first-time external administrations in construction went from 1,284 in 2021-22 to a peak of 3,596 in 2024-25, nearly three times the level in three years. That history is why a lender reads a construction application more carefully than most. It isn’t personal. It’s the sector’s own track record.
| Financial year | Construction | All industries | Share |
|---|---|---|---|
| 2021-22 | 1,284 | 4,912 | 26.1% |
| 2022-23 | 2,213 | 7,942 | 27.9% |
| 2023-24 | 2,977 | 11,053 | 26.9% |
| 2024-25 | 3,596 | 14,722 | 24.4% |
| 2025-26 | 3,472 | 14,153 | 24.5% |
The last row runs against the usual commentary, so here it is plainly: 2025-26 was the first fall in four years: construction down 3.4%, all industries down 3.9%. What hasn’t changed is the level or the concentration. Construction insolvencies are still 2.7 times the 2021-22 figure, and construction remains the single largest industry at 24.5% of all appointments, well ahead of accommodation and food services on 14.7%. A lender is pricing a sector that has stopped getting worse without yet getting better.
There’s a fairer way to read those numbers, and it works in construction’s favour. Ranking industries by the raw count of insolvencies mostly ranks them by how many businesses they contain, and construction contains more than any other industry in the country: 478,651 of them. Measured as a rate, construction sits well below the industry people rarely call risky.
| 2025-26 | Businesses | Insolvencies | Per 1,000 |
|---|---|---|---|
| Accommodation and food services | 114,369 | 2,078 | 18.17 |
| Manufacturing | 90,879 | 667 | 7.34 |
| Construction | 478,651 | 3,472 | 7.25 |
| Retail trade | 156,143 | 1,006 | 6.44 |
| All industries | 2,814,778 | 14,153 | 5.03 |
Construction runs at 7.25 insolvencies per 1,000 businesses against hospitality’s 18.17, two and a half times the construction rate. Construction is still above the national average of 5.03, and the caution is real, but the sector carries a reputation built on a number that’s large mostly because the sector is large. Our insolvency rate by industry and state has the full table.
Worth having in your pocket when a lender leans on the industry rather than your file.
Rate derived by us from ASIC Series 1 and the ABS Counts of Australian Businesses (businesses operating at 30 June 2026). Neither agency publishes it. ASIC counts companies and the ABS counts all businesses including sole traders, so this is administrations per 1,000 businesses, not a company failure rate.
ASIC Australian insolvency statistics, Series 1, first-time external administration and controller appointments by industry, released 14 September 2026. Complete financial years only: ASIC notes that the August 2026 month includes 542 related companies from a single property group, which distorts the part-year 2026-27 figures.
The counterweight is that the sector is still growing. The ABS counts of Australian businesses show construction business numbers rose 3.4% in 2025-26, a little above the 3.1% increase across all Australian businesses. So construction is expanding and failing at the same time, and a lender reading your file is weighing both at once.
The businesses that get funded fastest aren’t necessarily the biggest. They’re the ones that can show a lender the things this sector’s failure pattern is about: a documented pipeline, realistic staged payments, and a client base that isn’t concentrated in one or two head contractors. That’s the same documentation covered above. It isn’t a box-ticking exercise. It’s what separates a funded application from a declined one in a sector where the numbers are stacked against a weak file.
Which product fits which construction business?
| Business type | Asset finance | Cashflow products (overdraft, LOC, unsecured) |
|---|---|---|
| Civil construction | Straightforward | Usually straightforward, backed by contract certainty |
| Residential construction | Usually straightforward | Harder if income across jobs is lumpy or irregular |
| Trades | Straightforward, most common use case | Generally accessible given consistent project flow |
See our asset finance, business overdrafts, lines of credit and unsecured business loans pages for the detail on each product.
What margin does construction run on?
Thin enough that one bad contract shows up immediately. Construction earned 7.6% gross operating profit on sales across 2025-26. That’s better than retail at 5.5% and wholesale at 6.2%, but well under transport at 19.2% and professional services at 13.0%. Every dollar of wages supports $5.20 of sales, so labour is the dominant cost alongside materials.
On a 7.6% margin, a job that comes in ten per cent over doesn’t dent the year. It erases it. That’s the arithmetic a lender is applying when it asks about your next contract rather than your last one, and it’s why retentions and progress-claim timing matter more in construction than the headline turnover does.
Derived by us from ABS Business Indicators, June quarter 2026 release, tables 6, 15 and 17, financial year to June 2026. Gross operating profit is before interest, tax and depreciation. The ABS covers fifteen industry divisions, not every industry.
How long do construction businesses last?
Below average, but not the worst. 59.6% of construction businesses trading in June 2022 were still trading four years later, against 61.9% across all industries, and well above transport, postal and warehousing on 47.3%. New builders have the harder run: 48.0% of those that started in 2022-23 reached three years, against 49.2% nationally.
Source: ABS Counts of Australian Businesses, business survival and entries survival, June 2022 to June 2026. Survival counts businesses still operating, so a business sold or wound up solvently also leaves the count. It isn’t a failure rate.
When finance isn’t the right call yet
If you can’t yet show a lender what’s coming after your current job or contract, fix that before you apply, not after a decline. Pulling together a clear pipeline, even an informal one, and having your bank statement conduct in order often does more for your application than which lender you approach.
Tell us what kind of construction business you run
Civil, residential or trades: the right product depends on the shape of your income, not the industry label. We’ll tell you what’s realistic before you apply.
Give us the basics below and we’ll call you within the hour, or at the time you choose, then come back with the two or three offers worth your time.