Construction
Build bigger projects with the right capital behind you
$25K–$5MTypical funding range
70–85%Invoice factoring advance rate
6 hrsFastest time to funding
Recently fundedConstruction contractor·Middleburg, FL·$500K
Build bigger projects with the right capital behind you
Recently fundedConstruction contractor·Middleburg, FL·$500K
Construction businesses live and die by cash flow timing. You pay for materials, labor, and equipment weeks or months before the client pays you, and net-60 or net-90 payment terms are standard across the industry. Bay Street Lending connects contractors, GCs, and specialty trades with financing designed for the construction cycle — so you can take on bigger projects and grow your operation. From invoice factoring that turns receivables into same-day cash to equipment financing for heavy machinery, our 1,800+ lender network has the depth to support projects of any size.
Net-60 or net-90 payment terms are standard. Invoice factoring and working capital keep cash flowing between payments.
An excavator costs $100K–$500K. Equipment financing lets you bid on bigger jobs without buying outright.
New projects require upfront material purchases and crew mobilization. Working capital gets you started fast.
Take a $480,000 commercial subcontract billed in 4 monthly pay applications of $120,000. The work costs 80% of the contract and is paid as it is done: crews weekly, materials and rentals as they arrive. The GC holds 10% retainage on every billing and pays each approved pay application 45 days after it is sent. Retainage comes back 90 days after the last billing, once closeout paperwork and lien waivers are in.
| Month end | Paid out | Collected | Cash position | With factoring |
|---|---|---|---|---|
| 1 | $96,000 | $0 | −$96,000 | −$96,000 |
| 2 | $192,000 | $0 | −$192,000 | −$105,600 |
| 3 | $288,000 | $108,000 | −$180,000 | −$99,000 |
| 4 | $384,000 | $216,000 | −$168,000 | −$92,400 |
| 5 | $384,000 | $324,000 | −$60,000 | $10,200 |
| 6 | $384,000 | $432,000 | $48,000 | $26,400 |
| 7 | $384,000 | $480,000 | $96,000 | $74,400 |
The job makes $96,000 of gross profit. Before the first check arrives on day 75, though, it has consumed $192,000: 40% of the contract and two full months of costs. And $48,000 of that profit, 50%, is retainage that does not arrive until day 210.
Factoring each pay application as it is certified cuts the peak to $105,600 and costs $21,600 in fees across the job, leaving $74,400 of gross profit. It cannot close the gap on its own: each month's crew and material costs go out before that month can be billed, so roughly a month of costs still has to be funded some other way.
Positions are at the end of each month, after that month's costs are paid. The factoring column assumes an advance of 80% on the non-retained amount within 24–48 hours of each pay application and a fee of 2.5% per 30 days, counting a partial period as a full one. Your contract terms, GC and factoring agreement will move every number here.
Each part of that cash curve has a product built for it. Matching them keeps short-term money for the costs that are actually short-term.
| Part of the job | What usually funds it | On this job |
|---|---|---|
| Mobilization and the first month, before anything can be billed | Construction working capital, sized to your bank deposits rather than the contract | $96,000 of costs before pay application 1 goes out |
| Certified pay applications waiting on the GC | Construction invoice factoring on the non-retained amount | $86,400 within 24–48 hours of each one, $5,400 in fees when the GC pays in 45 days |
| Retainage | Usually waits for closeout; a few programs advance against it near completion | $48,000 held until day 210 |
| A machine bought for the job | Excavator financing or another equipment loan | $24,000 down and $4,480 a month instead of $240,000 at once |
The machine row matters more than it looks. Paying cash for a new mid-size excavator at $240,000 would push this job's peak from $192,000 to $432,000. Financed with 10% down over 60 months at 9% APR, it costs $24,000 up front and the rest is spread over the years the machine works. The same applies to skid steer financing and dump truck financing, and construction equipment financing compares rates and terms across a fleet.
Two contract terms move these numbers more than any rate does. A pay-if-paid clause makes your payment depend on the owner paying the GC, which a factor weighs before it advances. And the retainage percentage decides how much of the profit waits for closeout. The construction factoring guide covers pay-when-paid, pay-if-paid and public projects in detail.
Yes. Government invoices are actually preferred by factoring companies because of their reliability. Advance rates are typically 90%+.
Excavators, loaders, bulldozers, cranes, concrete mixers, generators, and any other construction equipment. New and used.
Absolutely. Subcontractors, specialty trades, and general contractors all qualify. Revenue and time in business matter more than your role.
Submit a certified pay application and receive 70–85% of the non-retained amount within 24–48 hours. When the GC pays, you get the balance minus the factoring fee. Retainage is paid by the GC at closeout and is usually not advanced.
Roughly what you pay out before the first payment arrives. On a $480,000 subcontract billed monthly, with costs at 80% of the contract, 10% retainage and a GC that pays in 45 days, the job ties up $192,000 before the first check, about 40% of the contract. Factoring each pay application cuts that to $105,600. Most of what remains is the month of costs that goes out before each pay application can be billed, which is what working capital usually covers.
Usually not until it is close to due. Most factors advance only on the non-retained part of a pay application, because retainage is not payable until substantial completion or closeout. A few programs advance against an accrued retainage balance near the end of a job, at a lower advance rate than a pay application gets.
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