Four Tools Bridge the Gap Between Draws
Contractors cover the stretch between fronting costs and a draw clearing with four tools: factoring against approved progress billings, a line of credit for payroll between jobs, equipment financing for machines and trucks, and a short-term loan to mobilise on a new contract. Which one fits depends on whether the gap traces to one specific unpaid billing or to a recurring monthly shortfall.
The timing mismatch underneath is structural. Materials, permits and labor get paid for long before a client releases anything, and progress draws sit at net-30 or net-60 while suppliers and crews expect money now. Handling it well is what separates contractors who scale from those who stall after one big job, and it's the central problem in construction business funding.
Buying Materials Before the First Draw
Large jobs often require a heavy materials order up front. Lumber, concrete, steel, and fixtures can consume tens of thousands of dollars before you invoice a single dollar. Waiting for a deposit to clear can delay the whole schedule.
A revolving line of credit is built for this. A business line of credit lets you draw for a material order, repay when the draw lands, and reuse the same limit on the next job. You only pay for what you actually use.
At FundBetter, most contractors qualify with about six months in business, roughly $15,000 or more in monthly revenue, and a credit score near 500 or higher. Reviewing what you qualify for leaves your credit score untouched.
Turning Unpaid Invoices Into Working Capital
Net-60 terms are common in commercial work, and they tie up cash you have already earned. When several draws are outstanding at once, payroll and the next mobilization can stall, and the decision comes down to invoice factoring versus a business line of credit.
Converting those receivables with invoice factoring puts cash back in your account now. You sell an unpaid invoice at a small discount and receive most of its value within a day or two. Repayment comes from your customer when they pay, so you're not stacking a monthly loan payment on top of the work.
Financing Heavy Equipment and Trucks
Excavators, lifts, trucks, and trailers carry large price tags, and buying outright can lock up cash you need for active jobs. Renting for every project eats into margins over time, and the alternative is a term structured so that equipment financing lets the asset pay for itself.
Spreading the cost with equipment financing matches payments to the machine's working life. The equipment usually acts as collateral, which often makes approval more accessible. Owning your core fleet can also lower long-term costs versus repeated rentals.
Covering Payroll Between Jobs
Crews need to be paid on schedule even when one project wraps and the next hasn't started. A short dry spell between contracts can threaten the team you worked hard to build. The Bureau of Labor Statistics notes that in northern climates, cold weather frequently limits construction activity in the winter, so in seasonal trades that pressure arrives on schedule every year, which makes managing seasonal cash flow part of the payroll plan.
A short-term business loan provides a lump sum to bridge that stretch, repaid over a few months as new work ramps up. It keeps skilled workers on your roster instead of losing them to a competitor. Specialty trades such as heating and ventilation contractors use the same approach to smooth payroll between installs.
Taking on Bigger Projects With Confidence
Growth in construction usually means larger contracts, and larger contracts demand more upfront capital. Bidding on a job you can't bankroll is risky, but turning down growth is costly too. The right funding lets you pursue scale without betting the company.
| Need | Funding tool | Why it fits |
|---|---|---|
| Materials and mobilization before the first draw | Line of credit | Draw, repay when the draw lands, and reuse the limit on the next job |
| Net-60 receivables tying up earned cash | Invoice factoring | Advance most of the invoice now; your customer repays it |
| Excavators, trucks, and heavy equipment | Equipment financing | Payments match the machine's working life, and the gear is the collateral |
| Payroll during a gap between contracts | Short-term loan | A lump sum repaid over a few months as new work ramps up |
Many contractors combine tools as they grow. A line of credit handles day-to-day gaps, factoring frees up receivables, and equipment financing builds the fleet. Amounts commonly run from $5,000 to $500,000, and established firms can access up to $5M for major projects.
Keep the Crew Moving While the Draw Clears
A materials order that has to land before the first draw arrives is the most common reason a contractor turns down work they could have delivered. Check your options with your revenue and outstanding billings to hand, and they come back covering a credit line, factoring against approved billings, or financing for the machine itself.
Money can move in as little as 24 hours and the review never touches your credit score. To talk through what you're bidding on first, call us at 786-882-2705.
