Operating cycle
Current WIP and project schedule.
Construction tax debt
Tax-debt funding has to fit the construction cash-flow cycle.
Progress claims, retentions, subcontractor payments and project mobilisation can create timing gaps even where the order book is healthy. A useful funding assessment separates the historic tax balance from the operating changes needed to prevent the liability rebuilding.
Assessment focus
What helps explain the position.
The exact information depends on the company, but these are useful starting points.
Cash conversion
Aged receivables, retentions and progress claims.
Tax control
BAS/PAYGW/GST breakdown and future tax-reserve process.
Historic debt and future obligations are different
Paying an existing ATO balance can improve immediate liquidity pressure, but the business still needs to reserve and pay future GST, PAYGW, super and income-tax obligations as they arise.
Look for the underlying cause
A one-off project delay, customer failure or expansion cost is different from a business that consistently cannot generate enough operating cash to meet tax and other creditors.
Prepare before applications open
Start with current management accounts, bank statements, tax statements, aged debtors and creditors, existing finance, and a short cash-flow forecast that shows future tax payments explicitly.
General information only. This page does not constitute legal, tax, financial or credit advice. SME Capital Partners is in pre-launch and is not currently offering or approving credit through this website.