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Cash FlowGlossary Term

Lien

A legal claim registered against a property or asset when a subcontractor hasn't been paid for work or materials. It prevents the owner from selling or refinancing until the debt is settled. In oil and gas and construction, liens are a key tool for protecting payment rights.

Related Terms

Operating Breakeven

Cash Flow

The minimum revenue a subcontractor must generate to cover all field operating costs without profit or loss. It includes direct costs like labour, fuel, and equipment. Knowing this figure helps crews avoid underpriced bids that drain cash.

Take-Or-Pay

Cash Flow

A contract clause requiring the client to pay for a minimum volume of services or materials, whether used or not. For subcontractors, it provides revenue protection when a project slows down or scopes are cut. Negotiate these clauses carefully to ensure your standby rates and mobilisation costs are covered.

Bridging Power

Cash Flow

A subcontractor's ability to fund operations while waiting on client payments. It covers payroll, fuel, and equipment costs between invoice and payment. Strong bridging power prevents work stoppages during slow pay cycles.

Schedule Iii

Cash Flow

A contract exhibit listing approved subcontractor rates, markups, and reimbursable costs. It governs what you can invoice and at what price. Disputes over billing often trace back to misreading this schedule.

Expansion Capital

Cash Flow

Funds raised or borrowed to grow a subcontracting business beyond its current capacity. This covers new equipment, additional crews, or entry into new service markets. It differs from operating capital, which keeps day-to-day work running.

Baseload

Cash Flow

A guaranteed minimum volume of work contracted over a set period. For subcontractors, baseload provides predictable revenue and justifies keeping crews and equipment on standby. It is the foundation around which additional spot or call-out work is scheduled.

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