Can you support contract-led projects with milestone billing and retention?

The short answer and how our support works

Yes — Best Business Loans can support contract-led projects by matching established UK businesses with finance providers who fund milestone billing, certified applications, and retentions. We are an independent introducer, not a lender, and we connect you with specialist lenders and brokers who understand contract finance, construction finance, and stage-payment funding. Our aim is to help you find relevant providers who can assess your project and cash flow against their criteria.

This type of funding is common in construction, engineering, M&E, shopfitting, fit-out, civil engineering, and framework contracts. Lenders in these markets recognise JCT, NEC, FIDIC, and similar forms, and they work with QS-certified valuations, pay less notices, and retentions. If your cash flow is squeezed between material purchases, labour, and delayed certifications or retentions, this could be the right route to explore.

Here’s the key point. Even when your customer pays on milestones and holds retention, there are finance options that can advance a proportion of those certified values. The exact percentage, limits, and pricing depend on your sector, contract wording, debtor quality, and trading profile. Our role is to help you reach the right specialists quickly and clearly, so you can make an informed decision.

Funding types that can cover milestones and retentions

• Construction and contract finance (advancing against certified applications for payment).
• Stage-payment finance for milestone-led projects in engineering and fit-out.
• Selective invoice finance for certified certificates or approved payment notices.
• Retention finance (advance a portion of final retention due on practical completion or defects expiry).
• Trade and purchase order finance for materials and subcontractors tied to the project schedule.
• Performance bonds and advance payment guarantees via specialist brokers.

Frameworks and certification

Many providers can work with JCT and NEC contracts where applications are certified by a QS or employer’s agent. They also consider pay less notices, variations, snagging, and defects periods. The provider will review the contract terms to understand set-off, adjudication risk, and payment mechanisms.

What lenders look for and how milestone funding is structured

Specialist lenders evaluate three things: you, the contract, and the end customer. They look at trading history, management experience, debtor quality, and your track record delivering similar works. They also assess the payment mechanism, certification process, and whether the contract is free from restrictive clauses like “pay-when-paid”.

In practice, providers often fund a percentage of each certified milestone or interim certificate. The advance rate can vary, but it is commonly lower than standard invoice finance due to contract risks and potential set-off. Where retentions apply, some funders offer a separate retention advance once practical completion or other conditions are met.

The strength of your buyer matters. Public sector and blue-chip counterparties are often viewed favourably because of predictable payment behaviours. Strong evidence of works completed, valuations, and on-site progress monitoring can also improve appetite. Clear, fair documentation and reliable reporting support a smoother onboarding.

Typical documents and information providers may request

• Copies of key contracts or subcontracts (JCT/NEC and any amendments).
• Programme of works, cash flow forecasts, and milestone schedule.
• Recent certified applications for payment and pay less notices, if any.
• Debtor concentrations, customer list, and credit limits.
• Management accounts, filed accounts, and aged debtor/creditor reports.
• Evidence of insurances, CIS compliance, and relevant accreditations.

Illustrative structure (example only)

Assume a £1,000,000 project across five milestones with a 5% retention. A funder might advance up to, say, 60–70% of each certified application, subject to concentration limits and contract review. Retention may be advanced separately at a lower percentage post practical completion or after the defects period.

Please note this is illustrative and not an offer or quote. Actual advance rates, fees, and eligibility are set by individual providers after full assessment. Our service helps you reach those providers who are best aligned with your contract and sector.

Costs, risks, and compliance you should consider

Costs vary by provider and contract risk. You may encounter a service fee, a discount rate or interest margin, and charges for site visits, QS oversight, or legal review. Pricing is influenced by debtor strength, contract wording, advance rate, concentration, and sector risk.

Risks in contract-led finance are unique. Set-off, defects, disputes, and variations can affect payment timing and quantum. Funders manage this with concentration limits, verification of certificates, and sometimes direct agreements with the buyer.

Here are practical points to review before you proceed. Check for any “pay-when-paid” or “pay-if-paid” language that may undermine assignability. Confirm who certifies, on what timeline, and how disputes are handled. Ensure your programme and cash flow account for retention and potential delays.

Key risks and common mitigations

• Risk: Disputes, pay less notices, or re-measurement reduce the payable amount. Mitigation: Keep immaculate records, signed variations, and prompt responses to notices.
• Risk: Set-off rights across projects. Mitigation: Negotiate ring-fencing where possible, and disclose to the funder early.
• Risk: Retentions delayed beyond expectation. Mitigation: Consider retention finance where available, or plan working capital buffers.
• Risk: Over-reliance on one buyer (concentration). Mitigation: Diversify if possible, and agree concentration limits up front.

Clear, fair, and not misleading

We are an independent introducer and do not offer loans or credit facilities directly. All finance is subject to status, eligibility, affordability, and the provider’s terms. We follow the spirit of FCA and ASA guidance to ensure content is clear, fair, and not misleading, and we encourage you to seek professional advice where needed.

We do not promise approval, specific rates, or the lowest costs. Any examples provided are for information only and are not offers. Your chosen provider will confirm full terms, fees, and obligations before you commit.

How to check eligibility and move from enquiry to funding

Our process is designed to be straightforward. You complete a Quick Quote with details about your business, the type of contract, and your funding goal. Our AI then shortlists providers that are active in your sector and comfortable with milestone billing and retentions.

If there is mutual interest, you may receive a no-obligation introduction to a lender or broker. They will outline indicative appetite and request documents to complete due diligence. Subject to approval, your facility can be set up and aligned to your certification cycles.

Timing varies by complexity, but many businesses see an initial decision in principle within days of engagement. Onboarding can be faster if your contracts, certifications, and financials are organised. Clear communication between you, the funder, and your buyer accelerates drawdowns.

Steps to get started

1. Submit a Quick Quote outlining contract value, milestones, and retention.
2. Receive a shortlist of relevant providers who fund contract-led projects.
3. Share documents for assessment and obtain an indicative decision.
4. Agree facility terms, limits, and verification process for certificates.
5. Onboard, assign or notify as required, and draw down against certified milestones.
6. Manage ongoing certifications and retention releases through the facility.

What to prepare

• Contract, milestone schedule, and retention terms.
• Recent certified applications and any pay less notices.
• Management accounts, aged debtor listings, and cash flow forecasts.
• Insurance certificates, health and safety policies, and CIS records.

Engineering and technical firms often benefit from these structures when projects are phased. For sector-specific guidance, see our page on engineering business finance solutions. We will connect you only to relevant providers who understand your industry context.

FAQs, use-cases, and next steps

Can milestone billing and retentions be funded if you are a subcontractor? Yes, subject to contract review, assignability, and buyer profile. Funders commonly work with principal contractors and approved subcontractors delivering defined work packages.

Will providers fund uncertified applications? Generally, providers prefer certified applications or approved payment notices. Some may consider verified stage claims with robust evidence and employer confirmation.

What percentage can be advanced? It varies by risk and counterparty. Advances against certified milestones often sit below standard invoice finance percentages, and retention advances are usually lower and conditional on practical completion or defects expiry.

Use-cases that commonly qualify

• Construction contracts under JCT or NEC with monthly certifications and 3–5% retention.
• Engineering projects with stage payments tied to FAT, SAT, or commissioning milestones.
• Fit-out programmes with clear valuations and employer’s agent certification.
• Public-sector frameworks where payment behaviours are more predictable.

Important eligibility notes

We typically support established UK businesses rather than start-ups or sole traders. Property development and commercial mortgages are not within our current scope. Each provider has its own criteria, and your application will be assessed on its merits.

Ready to explore providers who fund contract-led projects with milestone billing and retentions? Complete your Quick Quote for an eligibility check and introduction to suitable lenders or brokers. There is no obligation to proceed, and your enquiry is handled confidentially.

Updated: October 2025. Information is general in nature and may change. Please rely on final terms and disclosures from the finance provider before committing.

Key takeaways

• Yes — we connect UK businesses to providers who fund milestone-led contracts and retentions.
• Solutions include contract finance, certified application funding, stage-payment finance, and retention advances.
• Eligibility depends on contract terms, certification process, buyer quality, and your trading profile.
• Costs and advance rates vary and are set by the provider after assessment.
• Start with a Quick Quote to get matched for a no-obligation eligibility check.

Fairness and transparency

• We are an introducer and do not offer credit directly.
• No guarantees of approval or specific rates are made.
• All promotions aim to be clear, fair, and not misleading, aligning to UK regulatory standards.

Next step

• Complete your Quick Quote now to see which providers can support your contract-led project.