Contractors · Working capital
Working capital for contractors, including after credit challenges
Contractors pay for labor and materials up front and get paid in draws, sometimes weeks later. Working capital bridges the distance between starting a job and the first progress payment.
What to know
What contractors should know about working capital.
Mobilization is paid out of pocket.
Permits, materials, subcontractors and crew are due at the start of a job, while owner draws arrive on a schedule.
Retainage ties up cash.
Owners commonly hold back a percentage of each payment until completion, which can leave a contractor short on an otherwise profitable job.
Credit is one factor, not the only one.
Revenue-based working capital weighs deposits and contracts alongside credit, so contractors with credit challenges can sometimes still qualify at a higher cost.
Know the total payback.
Lower credit generally means higher cost, so compare total payback and repayment schedule across more than one offer.
FAQ
Common questions from contractors.
Can a contractor get working capital with bad credit?
Sometimes. Providers that underwrite on revenue and bank deposits may approve applicants with weaker credit, usually at a higher cost. Approval and terms are decided by each provider.
What can contractors use working capital for?
Common uses include materials, subcontractor payments, payroll, insurance and bonding costs. Confirm any restrictions with the provider.
Is working capital or invoice factoring better for contractors?
Factoring works when you have issued invoices that are waiting to be paid. Working capital helps with costs before billing, such as mobilization.
Is Truidian a lender or factoring company?
No. Truidian is a business solutions company. It helps businesses identify and connect with participating third-party providers, who make every approval, pricing and terms decision.
Tell us about your contractors business.
Share a few details and we'll identify participating providers whose programs may fit.
Truidian is a business solutions company, not a lender, factoring company or payment processor. Financing and services are offered by participating third-party providers and are subject to their approval and terms. Approval, funding, rates and terms are not guaranteed.