Stage Payments

Stage Payments

A stage payment is a partial payment made during the course of construction or other long-term projects. A contract will typically specify when stage payments are to be made, and for what percentage of the work completed.

Stage payments can help to finance a project by providing cash flow during its construction. They can also motivate contractors by aligning their interests with those of the project owner (i.e., ensuring that the contractor is paid for work that has been completed). Finally, stage payments can help to manage risk by Hedge Against Downside Risk In Construction Projects).