Short answer: Contractors pay crews and suppliers before draws, progress payments and retainage come in. A line of credit covers those gaps, and because it revolves, it’s ready again for the next job.
The contractor cash flow problem
On almost every job, money goes out before it comes in. Materials are ordered, crews are paid weekly, and the first draw might be 30 or more days away. Retainage can hold back part of your payment until well after the job is finished.
How a line of credit helps
- Buy materials before the first draw
- Make payroll while waiting on a GC or owner
- Handle change orders without stalling the job
- Fix or replace equipment without draining your account
Want to see what your business qualifies for? Answer a few quick questions or call (888) 707-0202.
Why not a term loan?
Construction costs come in waves. With a term loan you pay for the whole amount from day one. With a line of credit you draw what this job needs and pay it down as the job pays you.
What we look for
We work with general contractors, subs and specialty trades. Generally that means at least 6 months in business, about $15,000 or more in monthly revenue and a business bank account. No equipment or property is pledged.
Set it up before the busy season
The best time to get a line in place is before you need it. When the next big job lands, you’re ready to say yes.
