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Contractor Working Capital
Electricians, plumbers, HVAC, roofing, and other trade contractors frequently front labor and materials and then wait 30, 60, or 90 days to be paid by the general contractor. Working capital is about surviving that gap so you can keep crews busy and say yes to the next job.
Common cash flow and capital challenges
- Weekly payroll while waiting on monthly GC payments
- Material price swings between bid and purchase
- Seasonal slowdowns for exterior trades
- Back charges and disputed change orders
Financing that may suit this industry
Practical use cases
- Covering payroll on a job billed net-60
- Buying materials in bulk before a price increase
- Staying afloat through a winter slowdown
Eligibility considerations
- Recent deposits are often the main focus for short-term working capital
- For factoring, the paying GC's creditworthiness matters most
- Lien rights and pay-when-paid clauses can affect factoring eligibility
Typical documentation
- 3–6 months of business bank statements
- Invoices and AR aging (for factoring)
- Subcontract agreements
- Owner identification
Cost and repayment considerations
- Short-term working capital often has higher effective annual cost — compare total repayment
- Daily or weekly payment schedules affect cash flow differently than monthly ones
- Factoring fees rise the longer an invoice stays unpaid
Alternatives and trade-offs
Joint check agreements
Can help with supplier credit on larger jobs without borrowing.
Mobilization payments
Negotiating upfront mobilization in the contract reduces the gap you need to finance.
Frequently asked questions
Is working capital the same as a line of credit?
Not exactly. Working capital financing usually provides a lump sum for a short term; a line of credit lets you draw and repay repeatedly up to a limit.
Related guides
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LendNova LLC is a referral partner, not a lender. Availability, eligibility, rates, and terms are determined solely by independent funding sources. This page is general information, not financial advice.