By Jesse Fowler, Founder of J&J Renovations and J&J Plumbing Services
Construction doesn’t have a quality problem. It has a cash flow problem. And it’s killing good builders.
Australia recorded 3,217 construction insolvencies in 2024. That’s roughly 27% of all company failures nationally, in just one industry. Names like Probuild, Porter Davis, and Project Coordination didn’t go under because they forgot how to build. They went under because the money didn’t move fast enough.
I run a renovation and plumbing business in Canberra. The pattern is the same whether you’re building a $2 million custom home or replacing a hot water system. You pay your suppliers. You pay your trades. You pay your team. Then you wait. And wait. And wait to get paid.
That gap between spending money and receiving money is where builders die.
The real problem is structural
The construction payment chain works in a way that would horrify anyone in fintech. Builders and subcontractors are expected to finance projects out of their own pockets while waiting months for payment to trickle down. It’s an unofficial lending system with zero protections for the people doing the lending.
Research from Billd’s 2025 National Subcontractor Market Report paints a brutal picture. Forty percent of subcontractors retain half to all of their profits in the business just to fund operations. Forty-three percent don’t have enough working capital to cover unexpected expenses. And there’s a massive perception gap: general contractors think subcontractors get paid within 30 days, while subs report waiting an average of 56 days.
In the U.S., slow payments cost the construction industry an estimated $280 billion in 2024. In Australia, 72% of subcontractors receive late payments on 40% of their invoices. These aren’t rounding errors. This is a system designed to push risk downhill onto the people least equipped to absorb it.
Profit margins in residential construction sit at 2-4%. When you’re operating on margins that thin and waiting 83 to 90 days to collect revenue, one delayed payment can cascade through your entire operation. Wages still need paying on Friday. Suppliers don’t care that your client hasn’t paid yet.
So builders reach for credit cards. Personal savings. Retirement funds. The Rabbet 2024 Construction Payments Report found that use of personal retirement savings among contractors increased 150% in a single year. That’s not a business strategy. That’s desperation.
Fintech is building what banks never did
Here’s where it gets interesting for anyone watching the fintech space. Traditional banks never built financial products that match how construction works. The payment cycles are too long, the risk profiles are too unusual, and the project-based nature of the work doesn’t fit neatly into standard lending models.
A growing wave of fintech companies are stepping into that gap with tools designed specifically for how builders operate.
Milestone-based escrow is one of the most promising models. Amsterdam-based Renno raised €1 million in late 2025 to build a platform where homeowner funds go into escrow at the start of a renovation and release to the contractor only when verified milestones are hit. It removes the trust problem on both sides. No equivalent exists in Australia yet.
Invoice financing built for construction timelines is gaining real scale. Billd offers 120-day material financing terms that match how long builders wait to get paid, bridging the gap between 30-day supplier terms and 60-90 day contractor payments. They’ve secured a $144 million financing facility and are approaching a billion-dollar funding milestone.
B2B Buy Now Pay Later for construction materials is emerging fast. Flexbase offers a construction-specific credit card with 60-day interest-free terms and no personal guarantee. Mondu provides 90-day net terms for building materials merchants. These products address a simple reality: builders need materials now and get paid later.
In Australia, Payapps (acquired by Autodesk in 2024) processes roughly $50 billion in payment applications and is used by 70% of Australia’s top 20 construction firms. Their case studies consistently show 50% reductions in progress claim processing time. Brighte has funded over $2 billion in home improvements across 260,000 households, and they administer the ACT Government’s Sustainable Household Scheme.
On the AI side, Adaptive raised $19 million in 2024 for an AI-native construction accounting platform. One of their homebuilder clients recovered over $100,000 in previously lost reimbursable expenses using AI agents. Briq, valued at $150 million, automates up to 80% of routine financial processes in construction.
Why this matters beyond construction
The renovation market in Australia is worth $53.6 billion. The federal government is committed to 1.2 million new homes. State governments are mandating all-electric builds. Green finance products from Westpac, ING, Bank Australia, and the Clean Energy Finance Corporation are channelling billions into home upgrades.
Demand for construction services is only going up. But the industry’s financial infrastructure was built for a different era. Spreadsheets, manual invoicing, 90-day payment terms, and personal credit cards won’t cut it.
The builders who survive the current shakeout won’t just be the ones who do great work. They’ll be the ones with financial systems designed for how construction works in 2026. Fintech is building those systems. The industry needs to pay attention.