The builder expected the developer payment, but a financier may receive it
Clarify whether an expected developer receivable has been sold, assigned or otherwise directed to a financier before relying on it as builder cash.
Corporate Recovery Partners
01 / 06
The expected payment has another destination
The builder says a developer receipt will fund your overdue account. During the discussion it mentions that project invoices are financed. Ask how that affects this particular receipt. Money payable under the upstream contract may interact with a separate financing arrangement, so the gross receipt alone does not explain what the builder expects to have available for your payment.
Request an explanation of the amount expected to reach the builder after the relevant financing transaction, and what remains conditional. Do not demand confidential documents you have no authority to obtain or contact the financier as though you represent the builder. The purpose is to clarify the payment explanation through an appropriate, documented channel.
Business.gov.au's contract guidance recommends clear obligations and payment arrangements. Keep your own invoice terms distinct from the upstream sale and any financing arrangement being described. Ask your adviser to assess implications where necessary. This article does not establish the financier's rights, the validity of any assignment or your entitlement to money payable under someone else's contract.
Imagine the builder has already received an advance against the developer invoice and expects only a residual amount when the developer pays. Treating the full face value as new cash would misstate that explanation. Ask what the residual calculation includes and whether it is confirmed, rather than assuming the same invoice will supply its full value to the builder a second time.
Ask what portion the builder proposes to pay your business and on what date. Keep any fees, adjustments or unresolved conditions visible in your assessment without inventing figures. Continue to have your own claim process and deadlines checked. The existence of invoice finance neither proves the builder cannot pay nor provides a reason to abandon proper collection steps.
Keep the builder's explanation with the promise log and revise the cash forecast if the original amount was overstated. Obtain further advice if the proposed arrangement involves your consent or a change to your rights. A better funding explanation identifies the expected recipient and net availability, rather than counting an upstream invoice as uncommitted cash simply because its payment date is approaching.
