Construction cash advance while the check is out
You bought the materials and paid the crew. The GC or the insurance check is still out. A construction cash advance puts cash in your account now and is repaid from the deposits that follow, so it fits a wait with a clear end, not a job that loses money.
Business funding for contractors with business bank deposits. Never personal or payday cash.
How do you cover materials and payroll before the GC pays?
Contracting runs on paid-later money. The supply house wants payment at pickup, the crew gets paid every Friday, and the money for the work arrives after a pay application is approved, a draw is released or an adjuster signs off. While a GC or insurance check is still out, a roofer can be tens of thousands of dollars out of pocket on a job that is fully profitable on paper.
| Line | Who gets paid | Amount |
|---|---|---|
| Shingles, underlayment and flashing | Supply house, on pickup | $38,000 |
| Crew payroll for the job | Your crew, every week | $22,000 |
| Dumpster and permit | Hauler and the city | $3,000 |
| Cash out before you're paid | Total | $63,000 |
| Insurance check for the job | Arrives after the adjuster signs off | $90,000 |
Sample figures for one job, not a quote and not typical terms.
In that example the business has spent $63,000 and is owed $90,000. Nothing is wrong with the job. The problem is the weeks in between, and three more jobs starting in the same weeks. Working capital is what bridges that, and an advance is one way to get it. Before you fund the whole $63,000, look for the cheaper pieces: supplier terms on materials, a joint check from the GC, or a deposit from the homeowner on retail work. Fund only what is left.
GC draw or insurance check: which wait are you in?
Not every slow payment is slow for the same reason, and the reason changes how much cash you need and how sure you can be about the end date.
| GC progress payment | Insurance check | Homeowner retail job | |
|---|---|---|---|
| Who controls the date | The GC, after the owner pays the GC | The carrier and its adjuster | The homeowner |
| What usually holds it up | Pay app review, lien waivers, the owner paying late | Inspection, scope disputes, supplements | The final walk-through and punch list |
| What is held back | Retainage until close-out | Depreciation until the work is done, on some policies | Usually the final balance |
| What to show a funder | The approved pay app and the subcontract | The signed estimate and the claim number | The signed contract and deposit receipt |
On a GC job, the date you can count on is the one in your subcontract, plus however late that GC has paid you before. Write down what each GC has actually done on your last few jobs, not what the contract says. On an insurance job, the date depends on the adjuster, the scope and whether the carrier pays the homeowner, who then pays you. A supplement for hidden rot or extra layers can push the final check well past the first one.
Retail jobs paid by the homeowner are the third kind. Many contractors take a deposit at signing and bill the balance at completion, which shortens the wait but doesn't remove it when materials are bought up front.
Whichever wait you're in, size the money to the gap you can prove, not to the whole contract. If you can show the approved pay app or the signed estimate, a funder can see where the repayment comes from.
Money that costs less than an advance
Before you take on a payback, work through the cheaper sources in this order. Each one you use makes the advance smaller.
- Supplier terms. A supply house that knows you may give net terms on a job account. That is free money for the weeks it covers, as long as you pay on time.
- Joint checks. On a GC job, ask whether the GC will issue a joint check to you and your supplier. The supplier gets paid from the draw, and you don't front the materials.
- Deposits and mobilization billing. On retail work, a deposit at signing covers the first materials order. On commercial work, check whether your contract allows a mobilization line on the first pay app.
- Billing on time. A pay app sent a week late is a check that arrives a week late. Tight billing is the cheapest working capital a contractor has.
- A business line of credit. If the gap comes back on every job, a line you draw only when you need it usually costs less than a string of advances.
An advance makes sense for what is left: a gap with a known end, on a job that makes money, that the cheaper options didn't cover.
Fixed debit or a split of deposits: how is it repaid?
A funder buys a share of your future receivables and pays you for it up front. You agree to a total payback, and the funder collects it from your account in one of two ways. Card-split repayment takes a share of each card batch, which suits shops that run cards every day. Most contractors are paid by check and ACH, so the offer usually takes either a fixed debit or a share of everything that lands in the account.
| Fixed debit | Split of deposits | |
|---|---|---|
| How it's collected | $2,000 every week until $52,000 is paid | a set share of each deposit |
| Week with no check | $2,000 still comes out | $0 comes out |
| Week the $90,000 check clears | $2,000 | $9,000 |
| Cost of the money | $52,000 − $40,000 = $12,000 | $52,000 − $40,000 = $12,000 |
| Where it hurts | Dry weeks between draws | The weeks run longer if checks keep slipping |
The total cost is the same $12,000 either way. What changes is when it comes out. A fixed debit is easy to plan, but it keeps pulling $2,000 a week through the dry stretch you took the money to survive. A split of deposits falls to nothing when no check arrives and takes a big bite when one does, and if the GC keeps paying late, the debits run longer. Ask which one the offer uses, and run both against your real draw schedule in the MCA cost checker.
The price is set as a factor rate: a multiplier on the amount you receive that fixes the payback at signing. Compare offers by the payback and the debit in dollars, not by the rate on its own.
What to check before you sign
- The payback in dollars. Subtract the amount you receive from the total you repay. That number is the cost, whatever the offer calls it.
- The debit in dollars, and how often. Lay it against your slowest stretch between draws, not your average month.
- The reconciliation clause. On a fixed debit, it's the way to ask for a smaller payment when deposits fall. Find out how you request it and what the funder needs to see.
- Paying it off ahead of schedule. The factor rate fixes the total payback at signing, so paying the advance off early doesn't always lower it. Ask whether a discount applies, in writing.
- The personal guarantee. It makes the owner answerable if the business breaks the contract, for example by closing or switching the account the debits run through. Read what triggers it.
- Every fee. Origination, wire and bounced-debit charges belong in the written offer. If a cost isn't written down, ask before you sign.
- Other advances. Many contracts limit taking a second advance. If you already carry one, look at consolidation first.
If a clause is unclear, ask an attorney or your accountant before you sign. A term that isn't in writing isn't in the deal.
Already carrying an advance? Don't stack another
When one job pays late, it's tempting to take a second advance to cover the debit on the first. That puts two payments on the same account in the same dry weeks, and each new one is usually smaller and costs more. Some funders advertise second, third and fourth positions. Count the debits before you say yes.
If the debits you already have are squeezing payroll, start with MCA consolidation, which pays off open advances and replaces them with one payment. It isn't right for every file, and it has its own cost, so put it next to the other offers in dollars.
When an advance is the wrong move for a contractor
- The job loses money even after the check arrives.
- The money is for a truck, a lift or other equipment that earns for a long time. A lease or equipment financing, paid to the dealer, tends to cost less and runs as long as the equipment does.
- The wait has no end date, such as a disputed change order or a claim the insurer hasn't approved.
- The debit only clears in a week when a draw lands.
- Two or more advances already debit the account.
Options to price first: supplier terms, a business line of credit, a bank term product, or SBA-backed financing, which takes longer but is repaid monthly over a longer term.
Construction deals our funding partners have funded
One funding partner has shared a list of 30 deals it funded, about $1.97 million in total, by industry and amount. Those amounts come from the partner, and we haven't checked them against its records. Trade deals on that list, funded by our funding partners:
- Glass and glazing: $350K
- Roofing: $200K
- Fencing and decking construction: $60K
- Interior remodeling: $45K
- Cabinet painting: $40K
- Construction: $10K
The range is wide because a funder sizes an advance to what your deposits can repay, not to the size of the job you're waiting on.
How Afterfirst is paid
Applying costs you nothing, and Afterfirst MCA charges you no fee. Funding companies pay us a monthly membership, and the funder pays us a commission when a deal funds. What you owe on an advance is paid to the funder and is shown in your offer: the amount, the payback, the payment and the term. Membership level does not change the order or the terms of the offers shown to you. Higher plans can change when a funder sees a file.
The whole picture, with plan prices, is on our pay disclosure page.
What should a contractor send?
- Your completed application.
- Recent business bank statements.
- The pay application, invoice or insurance estimate for the money you're waiting on.
- A short list of open jobs, with contract amount, amount billed and retainage held.
- The contract for any advance you already carry.
Afterfirst MCA brokers the file. Your one application goes to the funders that work with contractors, and every offer comes back to you laid out in dollars so you can compare them line by line. We email you first from info@afterfirstmca.com. A person calls only if you ask.
What do contractors ask us?
My deposits look thin because a big check is still out. Will a funder see that?
A funder reads your bank statements, so a month with no draw in it shows as a low month. Send the pay application, the approved change order or the insurance estimate with your statements. It shows the money is owed to you and roughly when it should land, which helps a funder see the gap for what it really means.
Can I get an advance against retainage?
Not directly. Retainage is the share of each progress payment the owner or GC holds back until the job is closed out, and an advance is priced on the deposits that reach your account. Held retainage can still help your file: list each job, the amount held and what has to happen for it to be released, such as punch list sign-off or lien waivers.
Can I get an advance if most of my customers pay by check or ACH?
You can. Many contractors take few card payments, so the funder collects from your business bank account instead of your card batches. That usually means a fixed debit or a split of deposits, so ask which one the offer uses and how it behaves in a week when no check arrives.
Should I pay the supplier now or ask for terms first?
Ask your supply house first. Net terms, a job account or a joint check arrangement with the GC can cover materials at little or no cost. Fund only the part terms won't cover, so the advance is smaller and the payback is smaller with it.
Does sending the application touch my credit?
It does not. Sending the application and your statements doesn't trigger a credit check. If a funder wants one later, it needs your written okay first, and two funders reviewing the same file can mean two inquiries. More on that in our credit guide.
I already have an advance and the GC is late. What now?
Don't add a second debit to cover the first one until you've priced the way out. A second advance stacks a new payment on top of the old one in the same weeks. Read how MCA consolidation works, and send us both contracts so the offers we show account for the debit you already carry.
Do you work with roofers, fence builders and remodelers?
We do, and with glazing, cabinet, painting and general trades that have business bank deposits. The trade matters less than the deposits: a funder looks at what lands in your account each month and how evenly it arrives.
Sources: deal figures from a funding partner's list, not verified by Afterfirst; membership plan prices from how Afterfirst is paid. The roofing job and the $40,000 advance are our own sample figures.
Send your statements and the pay app you're waiting on
One application, and we'll lay every offer next to your draw schedule and your payroll. We email you first from info@afterfirstmca.com. A person calls only if you ask. Applying costs you nothing, and Afterfirst MCA charges you no fee. Funders pay us a commission when a deal funds, and funding companies pay us a monthly membership. The price of an advance is set by the funder and is shown in your offer.