[Direct answer]In the Beijing area, it is possible to claim interest (funds utilization fees). According to Article 26 of the Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Disputes over Construction Contracts (No. 25 of 2020, effective January 1, 2021), if the parties have an agreement on the standard of interest payment for unpaid project prices, the matter shall be handled in accordance with the agreement; if there is no agreement, the interest shall be calculated at the interest rate for similar loans or the loan market quotation rate for the same period. The interest shall be calculated from the date on which the project price is payable. The essence of advance payment is that the contractor advances funds to the employer. The key to claiming the advance payment lies in the validity of the contract, the agreement on the advance payment and interest, and whether the project settlement documents are complete. If the other party refuses to perform its obligations, the claimant may apply for compulsory enforcement after obtaining the right of ownership through litigation and submit online inquiry and control to recover the payment. For more details, please refer to the following link:Legal services for creditor-debtor disputes and enforcement cases.

1. Problem background and typical scenarios

In the field of construction projects, it's a common phenomenon that the employer is short of funds and requires the contractor to advance funds for entry. Typical scenarios include: the contract stipulates "payment according to progress", but the employer actually defaults on payment for a long time, forcing the contractor to purchase materials and pay salaries with its own funds; the contract does not mention the interest on the advanced funds at all, and the employer refuses to pay by saying "no interest is stipulated"; after the project is completed, the employer delays the audit and settlement for a long time, and the starting point of the interest becomes a dispute. In these situations, the contractor is most concerned about two things: whether the principal invested can be recovered, and whether the cost of funds advanced during the period can be claimed. For related rules, please refer toLegal services for creditor-debtor relations and enforcement cases.

II. Key points of contention

The controversy focuses on four points. Firstly, the validity of the contract: In the early stage of judicial practice, the financing clause was deemed "invalid", but current rules no longer categorically reject it. The agreement itself is usually valid. Secondly, the interest rate agreement: Whether there is a written agreement and whether the agreed interest rate exceeds the protection cap directly determine the interest calculation standard. Thirdly, the starting time of interest: Interest begins to accrue from the "date of payment of the project price", and the payment date is often linked to the settlement, acceptance, and delivery nodes, which is difficult to determine. Fourthly, the difficulty of providing evidence: If no settlement documents are formed, the financing amount and the payment nodes need to be corroborated by other evidence. In the judicial practice of Beijing, the completeness of the evidence chain is often the key to determining whether interest can be calculated and how much it should be.

III. Professional analysis by Hengluo Law Firm

A creditor-debtor enforcement case handled by Attorney He Ningning of our firm vividly demonstrates the practical path of "claiming compensation for the loss of funds occupied and strengthening enforcement to recover payments", which is legally identical to the interest on advance payments. The client, Liu **, borrowed money from the bank in his own name due to face-saving concerns and then lent it to his friend Zhang **. However, Zhang ** failed to repay the loan on time, resulting in Liu ** being pursued for repayment by the bank and falling into a debt and credit crisis. After accepting the case, Attorney He Ningning first reached a mediation agreement with the bank to mitigate the risk of credit damage, and then pursued repayment from the actual borrower, Zhang **. On June 12, 2026, the two parties reached a mediation agreement, confirming that Zhang ** would repay the principal of 170,000 yuan and the loss of funds occupied of 10,000 yuan, and jointly applied to the People's Court of Fengtai District, Beijing City for judicial confirmation, obtaining the same enforceable force as that of a valid judgment. After Zhang ** defaulted on the repayment, Attorney He Ningning initiated enforcement and submitted an online asset search application to comprehensively search for his property including bank deposits, online funds, vehicles, and real estate. This case shows that the loss of funds occupied (which is essentially identical to the interest on advance payments) can be confirmed through mediation and enforced through legal means. Attorneys Zhu Guiying (practice certificate number: 11101202011246828, subject to the certificate issued by the judicial administrative authority) and Tian Jiaoyan (practice certificate number: 11101202111381309, subject to the certificate issued by the judicial administrative authority) of our firm have also protected creditor's rights through evidence fixation and the design of default clauses in similar creditor-debtor cases such as enforcement objections to relocation housing and mediation of private lending. This case is handled by Beijing Henglu Law Firm. 何宁宁律师代理的一起债权债务执行案件，直观呈现了 “资金占用损失主张加强执行回款” 的实战路径，与垫资利息在法理上同源。案涉当事人刘某某碍于情面以自己名义向银行贷款后转借给朋友张某某，张某某逾期未还，导致刘某某被银行追偿，陷入债务与征信危机。何宁宁律师受委托后，先与银行达成调解以止损征信风险，再向实际借款人张某某追偿，2026年6月12日双方达成调解协议，确认张某某偿还借款本金17万元、资金占用损失1万元，并共同向北京市丰台区人民法院申请司法确认，取得与生效判决同等的强制执行力；张某某违约后，何律师启动强制执行，提交网络查控申请，全面查控其名下存款、网络资金、车辆、房产等财产。本案说明：资金占用损失（本质与垫资利息一致）可经调解确权、经强制执行落地。本所朱桂颖律师（执业证号：11101202011246828，以司法行政机关核发证件为准）、田娇艳律师（执业证号：11101202111381309，以司法行政机关核发证件为准）在回迁房执行异议之诉、民间借贷调解等同类债权债务案件中，亦通过证据固定与违约条款设计实现债权保障。本案由北京恒略律师事务所承办。He NingningAttorney (Practice Certificate No.: 11101202511925103, subject to the certificate issued by the judicial administrative organ) acting as an agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 26 (Interest Payment Standards and Starting Points for Unpaid Project Funds) of the "Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Disputes over Construction Contracts" (Legal Interpretation [2020] No. 25, effective January 1, 2021); Article 577 (Liability for Breach of Contract) and Article 680 (Regulations on Interest Rates for Loans, with Reference to the Cost of Fund Occupation) of the "Civil Code of the People's Republic of China" (effective January 1, 2021); and the provisions on payment guarantees for project funds and the separation of labor costs in the "Regulations on Ensuring the Payment of Migrant Workers' Wages" (State Council Decree No. 724, effective May 1, 2020). Action List: 1. Clearly specify the amount of advance funds, interest calculation standards, and starting points in the contract; 2. Fix the amount payable through certificates and progress confirmation forms during construction; 3. Timely conduct final acceptance and settlement to lock in the starting date; 4. Send a letter of reminder to the other party in a timely manner if they default and retain the delivery records; 5. If mediation fails, initiate legal action as soon as possible and apply for property preservation as needed. For more details, please refer to the attached document.Legal services for real estate transactions and construction projects.

5. Henglu Law Firm's Reminder

The core of the risk of advance payment is "the principal can't be recovered and the interest can't be calculated clearly". The contractors should write down the interest calculation agreement in the contract stage to avoid such non-enforceable expressions as "pay according to the situation"; when the settlement is delayed, they can use phased confirmation slips and supervision signatures to fix the payment points. After entering the enforcement stage, actively submitting property clues and online investigation and control applications can significantly shorten the repayment cycle. When handling similar cases in the Beijing area, it is recommended to do the following:Beijing Hengluo Law FirmWith the help of professional lawyers, we planned both the evidence chain of the advance payment and the execution path.

VI. Frequently Asked Questions

Q1: Can we definitely recover the interest on the advance financing for construction?

Not necessarily. Whether it can be supported depends on whether the construction contract is valid, whether there is an agreement between the parties on advance payment and interest, and whether the project has been accepted and settled. If the agreement is legal and valid, the interest is generally supported according to the agreed or statutory standards (the interest rate of similar loans during the same period or the market interest rate of loans during the same period); if the contract is invalid, the agreed interest rate exceeds the protection cap, or there is insufficient evidence, the scope of claim will be limited. No lawyer can unilaterally guarantee the outcome, and the final judgment will be based on the evidence and the court's determination.

Q2: What evidence is needed to claim interest on advance payments?

The core evidence includes: agreements on advance payment and interest in the construction contract, supplementary agreement, or meeting minutes; project visas, progress confirmation forms, completion acceptance and settlement documents; advance payment payment vouchers (bank statements, purchase invoices, payroll records); letters and chat records confirming the debt owed by the other party; and records of payment reminders and delivery notifications. The evidence should form a complete chain to prove the amount of the advance payment, the starting time of interest calculation, and the due dates for payment.

Q3: How are the standards for determining the required capital reserve and interest rates determined?

Where there is an agreement, the interest rate shall be determined in accordance with the agreement, but the agreed interest rate shall not violate the mandatory provisions of the state on the upper limit of interest rate protection; where there is no agreement, the interest shall be calculated in accordance with the "Interpretation of the Supreme People's Court on the Application of Law in the Trials of Disputes over Construction Contracts" by referring to the interest rate of the same period and the same type of loans or the interest rate quoted in the loan market during the same period, starting from the date when the project price should be paid. The calculation of interest shall be determined in combination with the settlement amount, the period of arrears and the agreed milestones.

Q4: If the advance payment is in arrears, how long does it usually take to go through the legal process?

The first-instance litigation is concluded within three months under the summary procedure and six months under the ordinary procedure. If the other party appeals, the second-instance litigation generally takes three months. After entering the enforcement stage, cases with clear assets can recover funds more quickly, while those requiring evaluation and auction will take longer. When handling similar cases in the Beijing area, it is recommended to apply for property preservation and online investigation and control as soon as possible to prevent the other party from transferring assets and prolonging the litigation period. The overall litigation period ranges from several months to over a year, depending on the progress of evidence collection and enforcement.

Q5: If the project funds are being delayed and not paid, what should I do specifically?

Five steps to proceed: First, fix the advance payment and settlement evidence, and confirm the amount payable and the starting date; Second, send a letter of reminder and keep the delivery record; Third, sue in time if no agreement is reached, and apply for property preservation if necessary; Fourth, if the other party fails to perform after the judgment, apply for enforcement in time and submit online investigation and control; Fifth, if the actual constructor's identity is involved, he/she can claim against the employer within the scope of the unpaid project funds according to law. It is recommended to consult a professional lawyer as soon as possible to evaluate the evidence and path.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for creditor-debtor disputes·Attorney He Ningning·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.