Construction · working capitalNovember 2026 edition info@sitedrawcapital.com
Menu
Working capital for construction

The draw is coming. Payroll is Friday. We fund the gap between the two.

Pay applications, retainage, net-45 owners and equipment deposits make construction cash flow lumpy by design. We size funding to the job and the draw schedule, not to a credit score, and put the full cost in writing before anyone signs.

Size a request to the job See how it works for contractors
  • Sized to the pay app, not the FICO
  • Decisions in 24–48 hours from statements
  • Every cost in dollars before signing
How a job pays

When the work gets done, and when the money shows up.

  1. Week 0

    Bid & mobilize

    Bonds, deposits on materials and equipment rentals go out before the first invoice exists.

  2. Every week

    Work in place

    Labor and materials are paid weekly while the value sits on the job as work in place.

  3. 1st of the month

    Pay app submitted

    Billed monthly on AIA G702/G703. Owner and architect review takes 7–14 days before approval.

  4. Day 40–75

    Net-30 to net-60

    Approved draws pay 30–60 days later; on public work, longer. Pay-when-paid clauses push it further down the chain.

  5. Until completion

    Retainage held

    5–10% of every draw is held until substantial completion — often months after the work is done.

  6. Months later

    Close-out

    Punch list, lien waivers and final retainage. The last 10% of the money arrives long after the last 10% of the work.

What we fund

What contractors bring to the desk.

All situations
The steps

Four steps from a short week to funded.

The full process
  1. 3 minutes

    Tell us the job and the gap

    Contract value, the draw schedule, what is due before the next pay app lands. Three minutes on the form, no credit pull.

  2. Same day

    Send three months of statements and the pay app

    Bank statements show the deposits; the approved pay app or signed contract shows the money on its way. We read both the way a partner will.

  3. 24–48 hours

    Compare the options in dollars

    An advance sized to the draw, a line of credit, equipment financing — each as amount, total payback and remittance, with the APR-equivalent beside any factor rate.

  4. A business day after signing

    Fund, remit, close out

    Funding usually lands within a business day of signing. The remittance is set to end as the draw arrives, with a reconciliation clause if the owner is late.

Worked examples

The math on a job, line by line.

Worked example

Covering two payrolls while pay app #3 is in review

A mechanical sub on a $1.4M hospital renovation. Pay app #3 for $118,000 was submitted on the 1st; the owner's lender releases draws net-45 after approval, and 10% retainage is held on every draw.

The gap
Pay app #3 submitted$118,000
Retainage held (10%)−$11,800
Expected in 45–55 days$106,200
Payroll due before then (2 × $31,000)$62,000
Supplier invoice due in 10 days$24,500
Gap to cover$86,500
The funding
Advance sized to the gap$90,000
Factor rate1.22 (≈ 65–70% APR-equivalent over 4 months)
Total payback$109,800
Remittance$1,290 per business day, 85 days
Cost of the bridge$19,800

The bridge, day by day

  1. Day 1

    Pay app #3 submitted

    $118,000 billed

  2. Day 4

    Funded

    $90,000 advance lands

  3. Days 5–12

    Two payrolls and the supplier

    $86,500 paid on time

  4. Day 50

    Draw #3 lands

    $106,200 after retainage

  5. Month 4

    Remittance complete

    $109,800 delivered over 85 business days

What it costs, in dollars Illustrative · not an offer
OptionAmountFactor rateTotal paybackCostAPR-equivalentTerm
Advance sized to the gap$1,290 per business day, 85 days$90,0001.22$109,800$19,800≈ 66%4 months
Business line of credit, if one is openCheaper when the owner pays net-30 and the line has room$90,000——≈ $2,70018% APR2 months

APR-equivalent here is cost ÷ amount ÷ months × 12, so you can hold a factor rate next to a loan's APR. Your terms depend on deposits, time in business and open positions, and every option comes quoted as total payback in dollars.

What the numbers say. The margin on the job is roughly $210,000. Paying $19,800 to keep the crew whole and the schedule intact is a decision the owner can make with the numbers in front of them, and the remittance runs about four months, paid from draws #3 to #5 as they land. If the owner pays net-30 instead, a line of credit would cost less; we say so when it does.

What partners check

What a construction file has to show.

Merchant cash advance

A lump sum now for a fixed amount of your future receivables, remitted daily or weekly. Quick, sized to the draw, and worth a hard look at the total before you take it.

Funding in 1–3 days
Revenue-based financing

Remits a percentage of revenue, so a slow stretch between draws remits less. A fit for seasonal work and uneven receivables.

Up to 12–18 months
Equipment financing

The machine secures the financing, which usually brings the cost down and stretches the term past what unsecured capital offers.

Terms of 2–7 years
Business line of credit

Draw when the gap opens and pay only for what you used. Made for a gap that keeps coming back, not a one-time hit.

Revolving
Published minimums

What a partner needs to see

Time in business
6+ months; 12+ for draws over $150K
Monthly deposits
$25,000+ on average across the last three months
Backlog
Signed contracts, approved pay apps or purchase orders in hand strengthen every file
Existing positions
One open advance is workable; three is a conversation about consolidation first
Credit
500+ FICO considered; deposits and backlog weigh more
Trades
GCs, mechanical, electrical, plumbing, concrete, excavation, roofing, framing, specialty subs

Close, but not quite there? Ask anyway. Deposits and the work already on the books matter more than any one line.

Check your fit
What contractors ask

Answers before you send anything.

More questions on the construction hub

Can I get funding against an approved pay application?

Yes. An approved pay app is the strongest thing a contractor can show a funding partner: it proves work in place and a dated receivable. The advance is sized to the approved amount less retainage, and the remittance schedule is set so it ends before or as the draw lands.

Does retainage count as revenue when I apply?

Partners look at bank deposits first, and retainage has not been deposited yet. It counts as backlog: it shows money owed on completed work. Bring the schedule of values and the retainage ledger; some partners will fund against retainage due within 90 days.

What if the owner pays late and my remittance keeps going?

Ask for the reconciliation clause in writing before you sign. Most advance agreements let the remittance be reduced when deposits fall; a daily remittance that ignores a late draw is the single biggest risk in this trade, and we structure around it.

Is an advance cheaper than factoring my pay apps?

Usually not per dollar — factoring runs 1.5–4% per 30 days on the invoice, an advance costs more per month. Factoring needs an owner who will pay the factor directly, which many GCs refuse. The advance is faster and does not involve your customer. We show both when both apply.

Guides

Read up before the next draw.

All guides
construction financing

Construction Financing: Options, Costs and How to Choose

Compare construction financing options for contractors: bank loans, SBA, credit lines and fast revenue-based funding, with real costs and examples.

8 min read construction business loan

Construction Business Loan: Fast Funding for Contractors

Compare construction business loan options for contractors: bank term loans, SBA 7(a), lines of credit and fast revenue-based funding, with real costs.

10 min read

Send the draw schedule. We'll price the gap.

Give us the amount and the day you need it. No obligation, and starting a request pulls no credit.

Size a request