Construction & trades
You don't have a capital problem. You have a timing problem.
Progress billing, pay applications, and retainage sitting ninety days out. The money exists — it's just not in your account on the fifteenth.
The real problem
The pay-app cycle versus payroll
You mobilize, you self-perform, you bill on the schedule of values. The pay app goes in, it gets reviewed, it gets paid thirty to sixty days later — minus retainage that sits until closeout. Meanwhile payroll runs every week and material suppliers want net thirty.
That gap is structural. It is not a sign of a weak business, and it does not go away by growing. It gets bigger by growing, because every new job front-loads cost before it produces a single invoice.
Retainage is the part nobody models. Five to ten percent of every job's value, sitting as trapped equity across every open contract simultaneously. For most contractors, total outstanding retainage is larger than the working capital they're trying to borrow.
An advance against money you're already owed is the most expensive way to solve this
A merchant advance prices your future deposits at a factor rate and takes a daily or weekly remit. But your deposits are lumpy — a pay app clears and then nothing for three weeks. A remit schedule that ignores that cycle drains you exactly when you're between draws. You end up taking a second position to cover the first one's remit, and now the timing problem has become a solvency problem.
What usually fits better
The instruments that match the problem
A working line of credit
Draw when the gap opens, repay when the pay app clears. You pay for the days you actually use the money, not a flat factor on the whole amount.
Mobilization funding
Capital sized to the specific job's front-loaded cost, structured against that contract's billing schedule rather than your general deposits.
Invoice financing
Advance against the receivable itself. You're already owed the money; the cost of accelerating it should reflect the credit quality of the payer, not your business's risk profile.
Equipment financing
If the capital need is actually a machine, finance the machine. The collateral is the asset, and the terms are a fraction of an unsecured advance.
The graduation path
Where this ends up
The endgame for a contractor is a bank line sized to your bonding and billing volume, with a rate that reflects your actual credit. Getting there means a clean current ratio, a real WIP schedule, and financials that don't require explanation. That's a twelve-month project, and it's what the Capital Roadmap plans against.
Before you take another advance against the money your GC already owes you, find out what the receivable is actually worth financed properly.
Read: Construction: you don't have a capital problem, you have a timing problem