Construction has a structural cash flow problem: you pay for labor and materials today, invoice when the work is done, and get paid 30, 60, sometimes 90 days later. The bigger the job, the bigger the gap. Growth makes it worse, not better — every new contract widens the stretch between money out and money in.
Add up your current receivables and note the average days-to-payment by customer. A GC who reliably pays at net-60 is not a risk — but they are a 60-day hole in your cash flow that you are financing out of pocket. Multiply your average monthly billings by your average collection period (in months) and you have the amount of your own money that is permanently tied up in other people's projects.
A business line of credit is built for exactly this pattern: draw to cover payroll and materials while you wait on receivables, repay when the payment lands, and pay interest only on the days you actually used the money. Unlike a term loan, you are not carrying debt during the months when collections are current.
The invoicing gap is a financing cost of being in construction. Name the number, tighten your billing practices, and keep a revolving facility in place so a slow-paying GC never decides whether you make payroll.
