Builders and tradies keep New Zealand moving, but few sectors carry cash flow as lumpy as construction. You pay for labour, materials and gear long before a payment claim is paid, and retentions can hold back part of your margin for months after the job is done. fundU offers business loans for builders, tradies and construction companies from $20,000 to $1m, secured on New Zealand property. We are a direct private lender, so we assess and fund the loan ourselves, and good businesses get a fair go even when the bank has said no.
Why is cash flow so tight for construction businesses in New Zealand?
Because the money goes out weeks or months before it comes back in. Most builders and trade businesses fund the gap between doing the work and getting paid, and one slow client can knock the whole programme over.
A typical month looks like this: wages and subcontractors paid weekly, supplier accounts due on the 20th, a payment claim submitted at month end and paid weeks later, and a slice of every claim held back as retention. Add a variation that's disputed, a head contractor who stretches payment, or a wet winter that slows progress, and even a profitable firm can end up behind with IRD or suppliers.
The pressure shows in the numbers. The Centrix Credit Indicator for July 2026 recorded 3,035 company liquidations in the year to May 2026, up 14%, and 755 of them were in construction, roughly one in every four. RNZ reported that March 2026 was the worst March for liquidations in 11 years. Many of those businesses had work on the books. What they ran out of was time and cash.
How do retentions and payment claims affect your cash flow?
Retentions and payment claims decide when you actually get paid, and both can stretch far longer than the job. Under the Construction Contracts Act 2002, payment claims and payment schedules set out what's owed and when, while retentions let the party paying you hold back part of each payment until the work, including any defects, is complete.
If retention money is withheld, the Act requires it to be held on trust and not mixed with other money. If the party holding it goes into receivership or liquidation, the receiver or liquidator becomes trustee of that retention money. That protection matters, but it doesn't put cash in your account this month. Our guide to construction retentions and payment claims explains how to plan around both.
Good to know: retention money held for you is meant to sit on trust, and you're entitled to regular reports on it. Knowing exactly what's owed and when it's due for release makes it a much stronger part of your repayment plan.
What do builders and tradies usually need funding for?
Most construction funding needs fall into a handful of patterns. The common thread is timing: the money is needed now, and the payment that fixes it arrives later.
- Bridging payment claims. Covering wages, subbies and supplier accounts while claims and retentions are outstanding.
- Paying IRD. Clearing GST and PAYE arrears or provisional tax before penalties and enforcement build up.
- Winning a bigger job. Funding materials, deposits and extra labour for a contract larger than your usual work.
- Plant and vehicles. Buying an excavator, a new ute fleet or specialist gear, often faster than traditional asset finance.
- Consolidating debt. Replacing expensive short-term loans, overdue trade accounts and credit cards with one secured loan.
- Growing the business. Buying a yard or workshop, buying out a partner or buying an established trade business.
For a bigger contract, see funding a big contract. For machinery, our equipment finance page compares property-backed funding with traditional options.
How does a property-secured business loan work for a trade business?
A property-secured loan uses equity in New Zealand real estate as security, so the decision is based on the property, the purpose and the exit rather than last year's accounts. That suits construction firms whose financials can look uneven from one year to the next.
The security can be your home, a rental property, or commercial or industrial property owned by you, your company, your family trust or a supporting party such as a family member. We can lend by first mortgage, or by second mortgage behind your existing bank loan so the bank loan stays in place. Our builder and developer loans are secured on conventional property, not on the project itself.
Repayment options can include interest-only, capitalised interest with no scheduled monthly repayments during the term, or principal and interest, depending on the approved terms. The loan is typically repaid from final payment claims, released retentions, a refinance back to your bank or business cash flow.
Situation → how fundU can help
| Situation | How a fundU loan can help |
|---|---|
| Head contractor paying claims late | Covers wages and suppliers until the claim is paid |
| Retentions tied up after completion | Bridges the gap until the retention is released |
| GST or PAYE arrears with IRD | Pays IRD out in full so penalties stop growing |
| Statutory demand from a supplier | Funds a settlement within the 15 working days |
| Chance to tender for a larger contract | Provides upfront cash for materials and labour |
| Bank declined your application | Assesses the property and the story, not just the accounts |
| Several expensive short-term debts | Consolidates them into one secured loan |
If a creditor has issued a statutory demand, don't wait. Our statutory demand guide walks through your options, and funding the debt out is often far better for you than letting a liquidator take control.
What does funding look like for a real construction business?
Every loan is assessed on its own facts, but most construction applications follow a similar path: a clear purpose, property security and a realistic repayment source.
Example scenario
A residential building company in Canterbury has three houses under construction. One client is slow to approve variations, two payment claims are overdue, and the company has fallen behind with about $80,000 of GST and PAYE. The director's home is worth around $1.1m with a bank mortgage of about $450,000, and the bank has declined a top-up.
fundU assesses a second mortgage of $180,000 over the home, leaving the bank loan untouched, with capitalised interest so there are no monthly repayments during the term. The funds clear the IRD arrears, bring supplier accounts up to date and cover wages until the builds are finished. The exit is the final payment claims and released retentions, with any balance refinanced to the bank once the company's figures recover. This is an illustrative example only.
What you'll need
You don't need financial statements or tax returns for the initial assessment. Having these ready helps us move quickly:
- Details of the property offered as security, including the record of title and any existing mortgage
- A short explanation of what the funds are for and how much you need
- Your repayment plan, such as payment claims due, retentions to be released or a refinance
- Copies of relevant contracts, payment claims and payment schedules
- Recent business bank statements
- Any IRD statements or arrangements if tax debt is involved
- Your NZBN or company details, and ID for directors and any guarantors
Our low doc business loans page explains the alternative evidence we accept.
How do I get started?
It takes a couple of minutes and doesn't affect your credit score. Tell us about your business, the property and what you need, and a lending specialist will call you back to talk it through. You can also call us on 09 875 4577.
Whether you're chasing late payment claims, clearing IRD or gearing up for your biggest job yet, see if you qualify today.
Frequently asked questions
Can a builder get a business loan while waiting on payment claims?
Yes. fundU can lend against property you, your company, your family trust or a supporting party own to cover wages, subcontractors and materials while payment claims and retentions are outstanding. The loan is usually repaid when those payments land, from a refinance to your bank or from ongoing cash flow, so a clear exit plan is part of every application.
Do you lend against the building project itself?
No. fundU secures its builder and developer loans on conventional New Zealand property, such as your home, a rental, or a commercial or industrial building, rather than on the construction project. That keeps the assessment simple and quick, and it means the loan can be used for whatever the business needs, from plant to IRD arrears.
Can a tradie with IRD debt or a bank decline still get funding?
Often, yes. We consider IRD debt, arrears, defaults and previous bank declines case by case. What matters most is the property security, what the money is for and how the loan will be repaid. Clearing GST and PAYE arrears early can stop penalties and enforcement action building up while you keep working.
How fast can a construction business be funded?
Because fundU assesses and funds loans itself, decisions don't wait on a bank committee. Once a loan is approved, funding can happen in as little as 24 hours in some cases. Timing depends on the property, the valuation and how quickly the lawyers can complete the mortgage documents.
What paperwork do I need to apply?
No financial statements or tax returns are needed for the initial assessment. We look at the property, the purpose, the exit and the full story. Useful supporting documents include your contracts, recent payment claims and schedules, bank statements and any IRD statements. A lending specialist will tell you exactly what's needed for your situation.
A practical next step
Ready to see what's possible?
Tell us what the business needs, when you need it and what property is available. A fundU lending specialist will call you back to talk it through — enquiring is free and won't affect your credit score.