Electrical Contractor Merchant Cash Advance & Business Funding
Electrical contractors can get a merchant cash advance to fund materials and payroll between progress payments. The money comes in draws and retainage, often weeks after the work. Staffing is fairly steady through the year, but payroll runs highest at year end. Funders read several months of deposits to smooth out the big checks.
How do funders read electrical contractors?
Funders ask about contracts in hand, retainage owed to you, and who your general contractors are. A backlog of signed work carries weight.
How does money come in for electrical contractors?
Commercial and new-construction work is billed in progress payments by ACH or check, with retainage held back until the job closes out. Service calls are paid by card or check. That mix means large deposits with gaps between.
Which months are slowest for electrical contractors?
This table shows how many people private electrical contractors (NAICS 23821) businesses employed each month, as an index where the year's average is 100. It comes from the Bureau of Labor Statistics Quarterly Census of Employment and Wages, the most recent full year available. Staffing is a stand-in for how busy a business is. Deposits can move more or less than headcount, so read it as the shape of the year, not your numbers.
| Month | Staffing index (average = 100) | |
|---|---|---|
| January | 97 | lowest |
| February | 98 | |
| March | 98 | |
| April | 99 | |
| May | 99 | |
| June | 100 | |
| July | 101 | |
| August | 101 | |
| September | 101 | |
| October | 101 | |
| November | 102 | |
| December | 102 | highest |
The low point is January at 97.3 and the high point is December at 101.9, a swing of 4.6 points. The steady staffing hides lumpy cash: draws and retainage.
| Quarter | Total payroll index (average = 100) |
|---|---|
| Quarter 1 | 93 |
| Quarter 2 | 95 |
| Quarter 3 | 99 |
| Quarter 4 | 113 |
Payroll by quarter can rise at year end for reasons like bonuses and overtime, not only more work.
What do electrical contractors use merchant cash advances for?
- Wire, panels and fixtures for a large job.
- Payroll between draws.
- A service van.
- Bonding for public work.
- Tools and lifts.
What does an advance payment look like in a slow month?
Staffing barely moves through the year here, so the slow month to plan for isn't seasonal. Say a general contractor holds a draw for a month and deposits come in 20% under average. Say a business like yours deposits $180,000 in an average month and carries a fixed payment of $18,000 a month, 10% of that average:
| Deposits | Fixed payment | Share of deposits | |
|---|---|---|---|
| Average month | $180,000 | $18,000 | 10.0% |
| A month 20% below average | $144,000 | $18,000 | 12.5% |
A fifth less in deposits turns a 10% payment into 12.5%. Keep a cushion for it, or ask how reconciliation works before you need it.
Which funding options fit electrical contractors?
Each page runs one option against this industry's slow months.
Same-day merchant cash advance for electrical contractors
Money the same business day for an urgent cost, with the fixed daily debit measured against a slow month.
Business line of credit for electrical contractors
A draw sized for a slow month, repaid in thirds, with the interest on the balance worked out.
MCA consolidation for electrical contractors
One payment in place of two, with the share of deposits before and after in a slow month.
Second position MCA for electrical contractors
What a second advance adds on top of the first, and what both payments take from deposits in a slow month.
Run a business like this?
Tell us your slow months up front and we'll look for funders that size for them. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.