A developer can sell out a project and still stop construction. Profit and cash are different questions: profit is earned across the whole project, but cash arrives on a kisti schedule and leaves on a construction schedule, and the two curves rarely align. The peak funding requirement almost always falls in the middle of the build, when spend is highest and collections have not caught up.
The three curves to put on one page
- Construction spend by month, from the programme and the contract.
- Collection, by month, from the payment plans of units already sold plus a realistic forecast for units not yet sold.
- Fixed costs — head office, finance cost, tax payments.
Plot them together and the gap is visible immediately. That gap, month by month, is what you are financing. Doing this before the payment plan is finalised is the difference between designing a plan and discovering one. See kisti collection.
Where developers get the forecast wrong
Optimistic sales velocity. Assuming the remaining units sell at the launch-month rate. Use your own trailing three-month average, and run a second scenario at half of it.
Collection assumed at 100 percent. Some instalments will be late. Apply your own actual on-time rate — if 88 percent of what was due last quarter arrived within thirty days, forecast with 88 percent, not 100.
Ignoring the tail. Utility connections, common area completion, snagging rectification and the final registration push all cost money after the collections have largely finished.
Treating buyer advances as free cash. Money collected against undelivered flats is an obligation. Spending it on land for the next project is how a developer ends up funding project three from project two's buyers, which works until it does not.
The levers, in order of speed
| Lever | Speed | Cost |
|---|---|---|
| Collect what is already overdue | Days | Staff time |
| Tighten the follow-up sequence | Weeks | Almost none |
| Offer a discount for advance payment | Weeks | Margin, and it must be authorised |
| Re-phase construction | Weeks | Programme delay, possible contractor claim |
| Release held inventory or adjust price | Weeks | Margin |
| Project financing | Months | Interest, security, covenants |
The order matters. Most developers reach for the last row first because it feels like the serious option, when the first two rows typically hold more money and cost far less. The overdue recovery playbook covers how to work the first two.
Multi-project reality
Companies running three or four projects almost always pool cash, and pooling is not inherently wrong — it is a legitimate treasury function. What is wrong is pooling without visibility. Each project should carry its own cash position and an explicit record of what it has borrowed from or lent to the group. Without that, the profitable project subsidises the weak one indefinitely and nobody can see it. See project-wise profitability.
Delay is the biggest single risk
A six-month construction delay does three things at once: extends finance cost, pushes milestone-linked collections back, and gives overdue buyers a reason not to pay. The three compound. Modelling a delay scenario at the start of a project takes an hour and is the most useful hour anyone spends on the budget. What a six-month delay costs puts numbers on it.
What to do next
Build one page for your largest project: construction spend, collection and fixed costs by month for the next eighteen months, using your own on-time collection rate. The largest monthly gap is your funding requirement, and knowing it now costs nothing — see collection and spend against one project.