Quick answer
To ask a customer for a deposit, say it as part of how you book jobs, not as a favour: name the amount, say what it secures, and say when work starts once it lands. Do it on the quote call, before they've mentally agreed to start. If the work is residential building, check your state's deposit cap first, because it can be as low as 5%.
Key points
- Ask on the quote call, in the same breath as the price. A deposit raised after the customer says yes feels like a new condition.
- Say what the deposit secures (materials, a booked slot), not that you need the money.
- Residential building work has legal caps. NSW is 10%. Victoria and Queensland are 10% under $20,000 and 5% from $20,000 up.
- Put the deposit terms in writing straight after the call, and check any standard terms for unfairness before you rely on them.
- A deposit is the cheapest working capital you have. When it won't cover the gap, that is when to ring about funding.
Ask for the deposit on the quote call, in the same breath as the price. Name the amount, say what it secures, and say when work starts once it lands: “To book you in, I take 30% up front, and we start the week it clears.” Said as the way you book jobs, not as a favour, most customers simply agree. Building work is the exception to plan for, because state law caps the deposit.
Why ask on the call, not in the email?
A deposit is the cheapest working capital a business has. It’s money from a customer who has already decided to buy, and it carries no repayments. But it only works if it’s part of the deal from the first conversation.
Ask early because:
- The customer is still deciding. A deposit mentioned before they say yes is a term. Mentioned after, it’s a new condition, and people push back on new conditions.
- You hear the hesitation. An email can’t tell you whether a pause means “fine” or “I’m not sure about you”. A call can.
- It filters. Customers who won’t put money down on a job that needs yours up front are the ones most likely to pay late later.
If you’re also working on the other end of the cycle, our guide to chasing unpaid invoices by phone covers what happens when the balance is due.
Before you dial: five things to settle
- The number, in dollars. Work it out before the call. “Thirty percent, which is $2,400” lands better than a percentage.
- What it covers. Materials ordered, a calendar slot held, a custom item made. If you can’t say what it’s for, the customer will ask.
- The start trigger. “Work starts when the deposit clears” removes any argument later.
- Whether a cap applies. See the next section. If you do residential building, this is not optional.
- Your fallback. A smaller deposit, a split, or milestone payments. Decide it now so you’re not inventing a discount while someone waits on the line.
Does your state cap the deposit?
For ordinary trade and service work, you set the deposit. For residential building work, the law does. The caps below come from the regulators’ own pages. Check them for the contract you’re writing, because they can change.
| State | Maximum deposit |
|---|---|
| NSW | 10% of the contract price (NSW Government) |
| Victoria | 10% under $20,000; 5% at $20,000 or more (Consumer Affairs Victoria) |
| Queensland | 20% up to $3,300; 10% from $3,301 to $19,999; 5% from $20,000 (QBCC) |
Queensland also allows up to 20% where more than half the work, by value, is custom-built or fabricated off-site, such as bespoke cabinetry or prefabricated structures. Victoria’s amendment bill passed Parliament on 11 September 2025, so look at the current Consumer Affairs Victoria page before you issue a contract rather than relying on an old template. Other states have their own rules, so ring your licensing body if you work elsewhere.
The practical consequence: on a $60,000 renovation in Victoria, a 5% deposit is $3,000, which may not buy the materials for the first stage. That gap is real, and it’s why builders plan the first progress claim and the working capital around it.
The script: asking for a deposit on the quote call
Keep it short, matter-of-fact and in the order: amount, purpose, trigger.
“The quote comes to $8,000 all up. To book you in, I take a 30% deposit, which is $2,400. That covers the materials I order the day it comes through, and we start the Monday after it clears. I’ll email the quote and bank details straight after this call. Does that work for you?”
Illustrative example only.
Why it works:
- Price and deposit together. It’s one package, not a sequel.
- A reason, once. “Covers the materials” is easy to accept.
- A date. The customer gets something for the money.
- A closing question. It invites the objection now, while you can answer it.
For repeat customers you trust, you can soften it: “I usually take a deposit on new jobs. Since we’ve worked together for years, shall we say 20%?” Be careful to apply the same rule fairly, or explain why you haven’t.
What to say when they push back
“Why do you need money before you start?”
“Fair question. I’m ordering the materials for your job on the day I start, and I’m holding your slot, so I can’t give that week to someone else. The deposit covers that. The rest is due when the job’s done.”
Illustrative example only.
“I’ve never had to pay a deposit before.”
“I understand, and plenty of people haven’t. It’s how I schedule work so jobs start when I say they will. If 30% is a stretch, I can do 20% and the rest at the halfway point. Would that suit you better?”
Illustrative example only.
“I’ll pay when it’s finished.”
“I can see why you’d prefer that. For a job this size, I’m not able to carry the costs up front. If you’d rather not pay a deposit, I’m happy to look at staged payments, so you only pay as each stage is done.”
Illustrative example only.
“Another quote didn’t ask for one.”
“That’s worth comparing. I’d ask what’s included and when they start. My deposit is how I lock in your date. If it’s the deciding factor, tell me, and I’d rather you were comfortable than rushed.”
Illustrative example only.
Don’t drop the deposit to zero because someone sounds annoyed. Move the structure (smaller, split, staged), not the principle that the job is paid for as it goes.
Confirm it in writing the same day
A deposit agreed on the phone is easy to misremember. Send a short message that states:
- the quote total and the deposit amount;
- what the deposit covers;
- the bank details and the due date;
- that work starts after the deposit clears;
- what happens if the customer cancels.
On that last point, be careful. If you use the same terms for lots of small business or consumer customers, unfair terms in standard form contracts can attract penalties (since 9 November 2023), according to Business SA. A clause that keeps the whole deposit regardless of the reason is harder to defend than one tied to costs you’ve actually committed. If you’re unsure, have a lawyer read your terms once. It is a one-off job and cheaper than a dispute.
If you set the price rise in the same conversation, our guide on how to tell customers about a price increase covers that script too.
A worked example: a deck builder and a $24,000 job
This is an illustrative scenario, not a real client.
Mick builds decks in Brisbane. A homeowner wants a $24,000 job. In Queensland, a contract of $20,000 or more has a 5% cap, so the maximum deposit is $1,200. Timber and fixings for the job cost around $7,500, and Mick’s supplier wants payment on delivery.
On the call, Mick doesn’t ask for 30%. He says: “The deposit on a job this size is capped at 5%, so that’s $1,200. After that I invoice by stage, with the first claim when the frame is up.” He sets the first progress claim to land before the timber bill is due, and he sends the contract that afternoon.
Mick still has a gap: about $6,300 of materials bought before the first stage payment arrives. A single job leaves that gap, and three jobs in a row multiply it. So he rings a lender to ask what a small short-term facility would look like, before he is stretched, not after.
When a deposit isn’t enough
Sometimes the deposit is capped, the customer pays slowly, or the job is bigger than your cash. A deposit is the first line of working capital, but it isn’t always the whole answer. If you regularly buy materials before you’re paid, it is worth knowing your options early. You can read how we explain how much and why on a call, and what talking to a business loan specialist is like. If you want to look at your numbers now, the enquiry is here: check your options.
Funding the gap between deposit and first payment: where to go from here
Asking for a deposit is a good habit. Some jobs still need more cash than a deposit will give you, especially when a state cap applies. That is a normal part of running a business that buys before it bills, and we talk with owners about it every day.
Enquiring takes about 60 seconds, and it won’t touch your credit file. Nothing is checked unless you decide to go ahead. We don’t send your details to a pile of lenders, so there’s no flood of calls. A real person looks at your situation and rings you. Please fill the form in accurately, including your turnover and the size of the jobs you’re funding, so we can match the right option first time.
Prefer to talk? Ring 03 4059 1829, Monday to Friday, 9am to 5pm Melbourne time.
Frequently asked questions
How much deposit should a small business ask for?
It depends on your costs up front. A common starting point is enough to cover the materials or bookings you'll commit to before the first payment. Service jobs with little outlay might ask for a smaller amount or none; custom or made-to-order work often asks for more. For residential building, your state's cap sets the ceiling.
What is the maximum deposit for residential building work?
In NSW the maximum is 10% of the contract price. In Victoria it is 10% for contracts under $20,000 and 5% for $20,000 or more. In Queensland it is 20% up to $3,300, 10% from $3,301 to $19,999 and 5% from $20,000, with up to 20% allowed when more than half the work is custom-built or fabricated off-site. Check your regulator for your contract.
Should I ask for a deposit on the phone or in writing?
Both. Raise it on the phone so you hear any hesitation and can answer it, then confirm the amount, what it covers and when work starts in a short email or on the quote the same day.
What do I say if a customer refuses to pay a deposit?
Stay calm and ask what's behind it. Often it is trust or cash timing. You can offer a smaller deposit, split it, or move to a staged payment tied to milestones. If a customer won't commit any money to a job that needs your money up front, it is reasonable to say you can't start.
Can I make a deposit non-refundable?
Only with care. If you use the same standard terms for many small business or consumer customers, an unfair term can attract penalties since 9 November 2023. A deposit that reflects real costs you've already committed is easier to defend than a blanket forfeit. Have a lawyer read your terms.
Does a deposit help when I apply for finance?
It shows customers are committing to your work, which supports the turnover story a lender reads. It also reduces how much you need to borrow to start a job. If the deposit still leaves a gap before the first progress payment, a specialist can talk through your options.