Rotorua Steel Structures owner Rotorua subcontractors are among those hit by the collapse of Mainzeal, which headed the recent Rotorua Hospital redevelopment.
Mainzeal Property and Construction - New Zealand's third largest construction company, employing 400 people - went into receivership on Wednesday.
Its director Richard Yan said the company could no longer continue trading due to a "series of events that had adversely affected the company's financial position", combined with a general decline in commercial construction activity and lack of shareholder support.
Jim Laing, owner of Rotorua's Exal Doors, said his company was owed a "considerable sum of money" by Mainzeal.
He hasn't heard from the receivers but isn't holding out hope he will get much, if any, of it back.
"There will be a considerable shortfall of money when it comes to paying out all the contractors," he said. "I don't rate [my chances of being paid] very highly."
Mr Laing said his company, which builds commercial and industrial security doors, had supplied to Mainzeal projects around the country for several years.
He said looking back, payments had been late, but he had no idea Mainzeal was in serious trouble.
"It came out of the blue ... there was no indication," he said. "They've probably been in trouble for a long time."
Exal was about two-thirds of the way through a contract with Mainzeal for the construction of the Coastlands Aquatic Centre on the Kapiti Coast, which was nearing completion.
"We were about to finish off the doors and send them off," he said.
Mr Laing said most Rotorua companies who worked in commercial construction were likely to have money tied up with Mainzeal, especially those involved with the hospital redevelopment.
"It's really serious," he said. "It will have a major impact on any small business."
That included Exal Doors.
"It will have an effect on our cashflow ... it will make it that little bit harder," Mr Laing said.
Dan Sycamore, owner of Rotorua Steel Structures, said the Mainzeal situation could be a disaster for many in town.
His company, which employs six staff, worked on the Rotorua Hospital project and was owed $50,000 by Mainzeal, he said.
Mr Sycamore said his small business had been operating in Rotorua since 1973, but this could spell the end.
"My guys don't know if they have got a job," he said.
"The whole company is in jeopardy ... it's been a tough time in the building industry, I thought we were going to get that $50,000 then bang, it's gone."
Mr Sycamore said 15 months after the hospital building was completed, the 10 per cent retention fee had not been paid out to subcontractors as there had been no formal practical completion. Now subcontractors were unlikely to ever see that money, he said.
"It's all over now, it will go to the receivers."
Lakes District Health Board said this week that the main work on the hospital had been completed last year but subcontractors had been on site this month doing rectification works. Board chairman Deryck Shaw said subcontractors should take up any issues with receiver, PricewaterhouseCoopers.