Why trade contractors run short between payments
Subcontractors buy materials, mobilize crews and meet weekly payroll, then bill monthly and wait for the general contractor to pay. Retainage can hold back part of every payment until the project closes. Roifunder helps electrical, plumbing, mechanical, framing, concrete and roofing contractors get funded through our funding partners for those gaps and for equipment.
- Materials and equipment rental at mobilization
- Weekly payroll against monthly progress billing
- Payments that arrive later than the contract says
- Retainage held until project completion
- Taking a second job while the first is still unpaid
Job-level payback: fund the gap only if the margin covers it
Treat each funded job as its own calculation. Net gain equals the job's gross profit minus the funding cost for the months the gap lasts. Build in the time from mobilization to the final payment, including retainage, because the funding payments run on their schedule regardless of when the general contractor pays.
Example: an electrical sub takes a $120,000 contract with $90,000 in costs and $30,000 of gross profit. It needs $40,000 up front for gear and four weeks of labor, and the first progress payment arrives about 45 days after billing. If the funding costs $5,000, net gain is about $25,000. If part of the contract is held as retainage for several more months, confirm the remaining payments still cover the funding schedule. Illustrative figures only.
| Days used per month | Rent avoided | Ownership costs | Monthly gain | Covers a $1,500 payment? |
|---|---|---|---|---|
| 4 | $1,800 | $600 | $1,200 | No |
| 7 | $3,150 | $600 | $2,550 | Yes |
| 10 | $4,500 | $600 | $3,900 | Yes, with room |
Equipment payback: own versus rent by utilization
Owning equipment pays back when the rental cost you avoid, minus ownership running costs, exceeds the monthly payment. That depends almost entirely on how many days a month the equipment works. Pull your rental invoices from the last year to count real usage before deciding.
Monthly gain = days used × daily rental rate avoided − insurance, maintenance and transport
Example: a mini excavator rents for $450 a day. Used ten days a month, owning avoids $4,500 in rent; after $600 of ownership costs, gain is $3,900 against an illustrative $1,500 payment. Used four days a month, gain is $1,200, which does not cover the payment, so renting is cheaper. Illustrative numbers, not quotes. See equipment financing.
Slow-paying general contractors and payment frequency
When payments arrive monthly or later, a daily or weekly funding payment can drain cash between checks. Contractors often do better with monthly schedules, a line of credit drawn per job, or a term matched to the project length. Invoice factoring is an alternative some owners compare for slow receivables.
Convert any daily payment to a monthly figure, about 21 business days, and lay it against your actual deposit dates for the last three months, not the contract's payment terms. A line of credit can cost less when each draw is repaid as a progress payment lands. For the conversion, see daily payment to monthly equivalent.
Taking the next job: does added capacity pay?
Adding a crew or taking overlapping jobs pays when the extra gross profit exceeds added labor, equipment and funding costs, and when your cash can cover two jobs' startup costs before either pays. Missing that second job has a cost too, but only count work you would actually be awarded.
Example: a plumbing contractor turning down a $60,000 job with $15,000 of gross profit because cash is tied up in a current project could fund $20,000 of startup costs. At an illustrative funding cost of $2,500, the added job nets about $12,500, if the new crew's costs are already in the estimate. Weigh that against what your business can afford.
When not to fund, and how to apply
Skip funding for jobs bid at a thin margin, contracts with disputed change orders, or a general contractor with a history of paying very late. Funding a job that barely breaks even turns a small profit into a loss once the funding cost and any delay are counted.
Requirements vary by product and funder; many look at time in business, monthly revenue and credit. Some approvals come within a day or two, depending on documents. Many funders ask for bank statements and may ask about current contracts. Apply once to compare options for your trade.
Frequently asked questions
How do I account for retainage when funding a job?
Treat retainage as cash that arrives late, often after the project closes. Leave it out of the payments you count on to cover the funding schedule, and check that progress payments alone can carry it. Your contract states how retainage works on that job, so read it before relying on any timing.
Is it better to rent or buy equipment for my trade?
It depends on how many days a month you use it. Owning makes sense when avoided rental cost minus insurance, maintenance and transport clearly exceeds the payment. If usage is occasional or tied to one type of job, renting keeps the cost variable. Pull a year of rental invoices to find your real usage.
What payment schedule suits a subcontractor?
One that matches when general contractors actually pay you, which is often monthly or slower. Daily or weekly payments can strain cash between progress checks. Compare each option as a monthly figure, set it against your real deposit history, and consider a line of credit that you repay as each job pays.
Should I fund materials before a job is signed?
Generally no. Funding materials for a bid that may not be awarded creates a payment with no revenue behind it. Fund once the contract is signed, the scope is clear and the margin has been checked against the funding cost plus a realistic payment delay.
Price the job, then apply
Compare job funding and equipment options for your trade through our funding partners.
Updated September 14, 2026 · Roifunder Funding Team