The critical point
Protecting the advance payment
The advance is the one payment that by definition cannot be certified: it is handed over before any work exists. That is why it concentrates almost all of the industry's mistrust. Protecting it is not about delaying it, but about backing it with a guarantee that responds if the works never happen.
Why the advance blocks the start
The builder needs funds for materials and plant before the first measurable progress. The payer has nothing to verify yet. It is a symmetrical deadlock, and the industry's usual answer — demand more advance, or refuse to give one — does not resolve it: it only decides who carries the risk.
Three ways to back it, and what each costs
| Instrument | What it protects | Cost to the builder |
|---|---|---|
| Bank guarantee | Repayment of the advance | Ties up a credit line |
| Contractual retention | Partially, after the fact | Reduces start-up liquidity |
| Surety bond | Repayment of the advance | Does not consume bank lines |
Insured Milestone 0
This is the programme covering that first payment with a surety bond, so the money handed over at the start is backed even if the works never proceed. The bond is under negotiation with a leading insurer: there is no signed contract and we do not present it as if there were.
What sits behind a protected advance
| Division | What it contributes here |
|---|---|
| PactStream | The Insured Milestone 0 bond, the escrow account, and the verification that releases the milestones that follow. |
| CostPact | The budget that sets how much advance is reasonable, and the site management that produces certifications from the first progress onwards. |
| FiscalCore | The fiscal treatment of the advance and of subsequent payments, with forms computed in real time. |
| PropertyJourney | On a development, the sale that precedes the advance and the after-sales that follows handover. |
The advance is only the first stretch. What decides whether a project is profitable is the months that follow, and there the ecosystem covers everything from buying materials to the fiscal close.
What happens with the rest of the payments
From the first measurable progress onwards the mechanism changes: no external guarantee is needed because there is something to certify. Capital is held in a regulated escrow account and each milestone is released against verified progress, within 24 hours of certification.
Frequently asked questions
What is a surety bond?
An insurance policy under which an insurer answers to the beneficiary if the principal fails to meet a specific obligation, such as repaying an advance. Unlike a bank guarantee, it does not consume the builder's credit line.
How large should an advance be?
It depends on the weight of materials and plant at start-up, not on a fixed rule. The useful question is not how much, but with what backing: a larger advance with a guarantee is less risky for both sides than a small one without.
Can the developer recover the advance if works never start?
With a surety bond, yes: the insurer answers for repayment. Without a guarantee, recovery depends on the builder's solvency and, in practice, on litigation.
Does this delay the start of works?
That is not the intent. Backing the advance is precisely what allows it to be handed over with confidence so the works can start, instead of spending weeks negotiating who carries the risk.
A protected advance is the entry point to the cycle. Custody, verification and payment follow.
Request the dossier See the ecosystem