How to check a builder before you price: the ten-minute credit check
Before taking on a builder's credit risk, check the exact company named in the subcontract: its ASIC record, court winding-up lists, the adjudication registry, the PPSR, a credit report and the Payment Times Register, then ring a trade on one of their current jobs. It takes about ten minutes.
Chapter 12: Credit-check the builder before the builder credit-checks you
Before a builder lets you a $500,000 package, its contracts team checks your insurance, licence, safety record, recent projects and often your credit file. Before you extend that builder $500,000 of credit, you probably check nothing. This chapter is the check a bank would run, cut down to ten minutes. It starts with one question: which company are you actually contracting with? Often it's a project company set up for one job, with one director and no assets but the head contract.
Run every search against that company and its parent. ASIC for the incorporation date, directors and recent changes. The court lists for winding-up applications. Your state's adjudication registry: one determination in five years is a dispute, four in eighteen months is a pattern. I once found a builder with several six-figure determinations made and unpaid, and a subbie about to sign with them who had no idea. Then the PPSR, a credit report and, for big builders, their published payment times.
The builder's own paperwork tells you about its cash too: a payment term longer than the Act allows, a fight to keep it, or a 10 per cent retention ask. If the check comes back bad and you still need the job, shorten the credit with fortnightly claims, take security such as a PPSR registration or a parent guarantee, and price the risk: two or three per cent for a builder with a default on file.
- 1The company named in your subcontract is the one that owes you, and it may be a project company with no assets.
- 2A company with one payment default has around a one in five chance of failing within a year, rising to nearly two in three with three defaults.
- 3A payment default lodged by another subcontractor is the most important single line you'll read about a builder.
- 4Ask which entity you're contracting with, whether retention is held in trust, and whether the project is financed.
Get the ACN of the builder you're about to price for from the draft subcontract. Run the ASIC extract, the adjudication registry and a credit report, and ring one subbie who has worked for them this year. Write it on one page and staple it to the tender. If it makes you uneasy, the price should say so.
Common questions
How do I check if a builder is financially sound?
Start with the exact company in the subcontract. Search ASIC for its history and directors, check the court lists for winding-up applications, search your state's adjudication registry, and run a PPSR search and a credit report. Then ring a trade who has worked for them recently. None of it is a guarantee, but together they show patterns.
Should I ask a builder for a parent company guarantee?
If the subcontract is with a project company set up for one job, asking for a parent company guarantee for payment is a normal request, and the answer tells you something either way. For a small builder, a director's guarantee may be an alternative. Get advice on the wording before you rely on it.
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A summary of chapter 12 of Screwed Down by Mat Kennedy. Index figures are as they stood when the book was written (Sept 2026); the live numbers are on the Index. Amazon ranking as seen in September 2026. General information, not legal advice.