Third Position Merchant Cash Advance for Construction
A contractor carrying two merchant cash advances can sometimes add a third, but three weekly debits keep coming out between draws. Test the stack against a month when a draw lands late, leave retainage out of the math, and price a consolidation next to it.
Three weekly debits between draws
Lumpy deposits, steady debits
Contractors get paid in draws and progress payments, not daily batches. Three weekly debits keep coming out in weeks when no draw lands, so the cushion between draws matters more than the monthly total.
Retainage stays out of the math
The share a customer holds back until a job closes isn't in the account. Funders size the stack on deposits that arrived, and so should you.
A contractor stack worked through
Example: a contractor deposits $180,000 in a typical month, in three draws. Two open advances take $2,400 and $1,600 a week. A third offer is $30,000 at a 1.42 factor over 26 weeks, or about $1,638.46 a week.
| Debits | Per week | Per month | Share of a $180,000 month | Share of a $95,000 month |
|---|---|---|---|---|
| Two open advances | $4,000 | $17,333 | 9.6% | 18.2% |
| With the third | $5,638.46 | $24,433 | 13.6% | 25.7% |
The $95,000 month is the same business with one draw paid late. The third offer costs $12,600, about $0.42 per dollar received, with an estimated APR near 145%. A single late draw nearly doubles the share of deposits the stack takes.
How funders read a contractor stack
The gaps between draws
A third funder checks the lowest balance between draws after the two open debits. Weeks that dipped below zero count against the file more than a large month helps it.
The job pipeline
Signed work that pays over the term supports the file. A gap between jobs during the term gets a close read, because the debits keep coming either way.
When a contractor should consolidate instead
- Weekly debits already drain the account before the next draw arrives.
- Suppliers or crews have been paid late since the second advance started.
- The third advance would mostly bridge the first two payments until a draw.
- Either open contract limits new advances without consent.
Compare a third position with MCA consolidation for construction on total payback and on the weekly debit in a month with a late draw.
Quick answers
Can a contractor take a third merchant cash advance?
Some funders review it when the two open advances have been paid on schedule and draws arrive steadily. Expect a smaller amount than the first two and a term that ends close to theirs.
Why do weekly debits matter more for contractors?
Draws arrive a few times a month, and some arrive late. Weekly debits come out on schedule either way, so the account needs a cushion that covers every debit between draws.
Does retainage count as deposits?
No. Retainage held until a job closes isn't in the account yet, and funders read the deposits that actually arrived. Plan the stack around cash received, not contract value.
More for construction
- Second position merchant cash advance for construction
- How funders read construction
- Third position MCA: the stacking math
Run your own numbers with the stacked payment calculator.
Running jobs with two advances open?
Call 877-FUND-654 with every open contract in hand. We call you back, and we always talk with you before we shop your file.