Contractors
Progress Payments and Retainage: Keeping Contractor Cash Moving
Contractors close the billing gap with a line of credit sized to payroll and material runs, keeping equipment on its own financing schedule. Know the size of your worst gap and fund to that number.
Progress billing pays you as work completes, and retainage holds back a slice until the project closes. You float labor and materials through both, so the real question is how deep that float gets.
Funding the float
- Measure the worst-case gap: peak monthly costs across the slowest payer
- Size a line of credit to that number plus a buffer
- Draw as milestones are submitted, repay as they clear
- Keep equipment out of the operating line, on its own schedule
Where each need fits
| Materials and payroll float | Line of credit |
| Equipment and fleet | Equipment financing |
| Retainage at project close | Working capital, repaid when retention releases |
| Growth into larger projects | Line increase supported by backlog |
Backlog is the story. With contracts and a clean draw history, larger facilities follow.
Frequently asked questions
What do lenders want to see?
Backlog, contract terms, billing history and a clean receivables trail.
Can the facility grow with the backlog?
Often, yes. Facilities can be structured to step up as contracted work grows.