Cashflow is one of the real, practical reasons builders and developers look at a modular delivery method, not just program speed. When a large part of the construction value is being produced in a factory rather than assembled on site over months, the progress claim structure looks different, and it is worth understanding that difference before it affects a project’s funding.
Why factory production changes the claim profile
On a traditional build, progress claims track site milestones, slab, frame, lock-up, fit-out, spread across the full site program. On a modular project, a significant share of the building’s value is completed inside the factory before it ever reaches site. That value still needs to be claimed and funded as it is produced, which means claims are tied to production milestones, not only to what is visibly standing on site.
What this means for a developer’s funding
A financier or a developer’s own cashflow model built only around visible site progress will misread a modular project, the site may show less physical progress at a given point while a large share of the contract value has already been completed and is sitting in the factory or in transit. Getting the claim structure and the funding model aligned to production milestones, not just site milestones, avoids a funding gap that has nothing to do with the project actually being behind.
What a builder or developer should confirm upfront
- How production milestones map to claimable value in the head contract or the supply agreement
- What evidence substantiates a factory-stage claim, photos, inspection sign-off, the Regulation 126 certification stage reached
- How this is communicated to the project’s financier before claims start, not after the first one is queried
Where this fits with the rest of the project program
This is part of why early engagement matters. A supply agreement and claim structure confirmed during ECI, before production starts, means the financier and the project team are working from the same model from day one, instead of reconciling a mismatch mid-build.
FAQ
Why do modular progress claims look different to a traditional build?
Because a significant share of the construction value is produced in the factory before reaching site, claims are tied to production milestones as well as site milestones, not only to visible site progress.
Will my financier understand a production-milestone claim structure?
Most will once it is explained and documented upfront. The risk is a financier assuming a traditional claim profile and reading factory-stage progress as a project being behind.
What evidence supports a factory-stage claim?
Production stage photos, inspection sign-off from the engaged building surveyor, and the certification stage reached, confirming the claimed value genuinely reflects completed work.
When should the claim structure be agreed?
Before production starts, ideally during the ECI stage, so the supply agreement and the financier’s expectations are aligned from the outset.
Structuring finance around a modular program?
Talk to us before you lock in a claim structure with your financier. Email info@ecoprestige.com.au or download our technical brochures.