Capital that funds the gap between job and pay.

How do contractors finance a job before the first draw?

Three ways, and the job decides which one. If you have a signed contract and a draw schedule, a term loan sized to the mobilization budget is the cleanest fit. If the holdup is a general contractor who pays net 60, factoring the invoice turns that receivable into cash in a day or two. If you run several jobs at once and the need moves around, a line of credit lets you draw and repay as each job cycles. All three are available without pledging the property itself, which is what separates this from a bank construction loan.

What we see funded

• Mobilization capital at the start of a new project — covers initial materials and labor before the first progress draw.
• Equipment financing for trucks, lifts, excavators, and tools. Specialty equipment lenders work very differently from generalist lenders.
• Material lines of credit for contractors who run multiple jobs simultaneously and want a single capital source for material purchases.
• AR factoring for subs whose GCs pay net 60 or 90 — uncomfortable on a labor-heavy build.
• Bridge capital for slow-pay disputes — sometimes the GC is fine for the money but a punch-list dispute holds final payment for two months.

What a construction deal usually looks like

A site-work sub wins a $700K municipal contract. Mobilization runs about $95K — crew, fuel, aggregate, and a month of equipment rental — and the first progress draw is 45 days out. We place a $100K term loan over 18 months, timed so the payments start after the first draw lands. From signed application to funding is about six business days.

Equipment is a longer horizon. A used mini-excavator at $60K goes 48 to 72 months, and the monthly payment is generally less than what the same machine costs to rent. On the factoring side, a $180K progress invoice against a solid GC advances at 85%, so roughly $153K hits the account within 48 hours of the invoice being approved.

What lenders look at

Construction lenders sort work into two buckets.

Contracted work is easy. Permits pulled, contract signed, draw schedule in writing. Lenders are comfortable here because they can see where the money comes from.

Spec work is hard. Building before you have a buyer means the lender carries the sales risk with you. Most decline it, and the ones who don’t charge for it.

Beyond that they want three documents. A WIP schedule, which is simply a list of your open jobs showing what each one is worth, what you have billed, and what is left to bill. An AR aging report, showing who owes you and for how long. And your bonding capacity, if the work you chase requires bonds.

Factoring flips the question. There the lender studies the GC who owes you, not you. Your credit can be mediocre and the deal still works if the GC pays reliably. That same logic drives trucking financing, where the broker’s credit carries the file.

What we recommend

Timing problem on one known job? Mobilization capital or factoring. Buying a machine that will pay for itself across many jobs? Equipment financing, every time. Steady business and a need that moves week to week? A line of credit.