This happens all the time with big ticket manufacturing. If customer payments start being late or people walk away owing money, the cash flow slows. So you start using a revolving line a credit to pay for materials and parts to complete a job. Once the line of credit drys up, people make the mistake of using new customer deposits to pay for parts to finish the jobs in progress. Eventually, the lack of cash flow catches up to you and you can't pay the bills, suppliers put you on a "cash up front" deal before they send you materials, and then you're out of business because you can't get what you need to build the cars and pay the workers. Unfortunately, alot of folks get stuck with money out and nothing to show for it.
If you're spending big money up front, make the builder purchase a performance bond to protect your investment in the event the builder can't complete the contract.
