Construction MCA Leads

What does cash flow look like for a contractor?

Contractor cash flow arrives in large, irregular payments that trail the work by weeks or months. A subcontractor submits a pay application at the end of the month, the general contractor reviews it, the owner or lender approves it, and the check or transfer follows. Meanwhile the sub has already paid for materials, rented equipment and run several payrolls.

Retainage makes the gap wider. Owners commonly hold back a share of each progress payment, historically up to 10 percent, until the project is finished and punch-list items are closed. Some states have tightened this. California, for example, capped retention at 5 percent on most private projects for contracts signed on or after January 1, 2026, with exceptions such as certain smaller residential projects. Rules vary by state and by public or private work, so confirm current law with counsel. Either way, a contractor with several jobs underway can have a meaningful amount of earned money sitting in retainage.

This is why construction owners call about a merchant cash advance even when their books show a profitable year. The money exists. It just is not in the bank yet.

How big is the construction market in 2026?

Construction remains one of the largest sectors in the economy, though growth has cooled. The U.S. Census Bureau estimated total construction spending at $2,164.4 billion in 2025, 1.4 percent below 2024. Private residential work came in at $905.2 billion and private nonresidential at $742.4 billion, both down, while public construction rose 3.6 percent to $516.8 billion.

Contractors are still busy. Associated Builders and Contractors reported its Construction Backlog Indicator at 8.8 months in June 2026, meaning the average member had nearly nine months of work under contract. Backlog is good news for a funder: it suggests revenue ahead. It also explains the cash crunch, because every new job requires money up front before the first draw arrives.

Why do contractors choose a merchant cash advance?

Contractors choose an advance mainly for speed and because traditional credit lines often lag their growth. A bank line sized to last year's revenue does not cover this year's larger jobs. When a contract is signed and mobilization starts next week, waiting on a long approval is not an option.

• Materials. Lumber, steel, concrete, wire and pipe must be bought or deposited before work starts.
• Payroll between draws. Crews are paid weekly. Pay applications are approved monthly at best.
• Equipment. Repairs to an excavator or a down payment on a new truck or lift.
• Bonding and insurance. Larger contracts bring higher premiums and collateral requests.
• Seasonal ramp-up. In northern states, work slows in winter and restarts in spring with a burst of hiring and purchasing.

Requested amounts in construction often run higher than in consumer-facing sectors, because a single job's materials can cost more than a month of a restaurant's sales. Set your advance amount filter with that in mind.

Ask the owner how the advance will be repaid from the job itself. A contractor who can name the project, the draw schedule and the expected release of retainage gives the underwriter a clear story, and a clear story moves faster than a vague request for working capital.

What underwriting issues come up in construction files?

The biggest issue is uneven deposits. A contractor might show two large deposits one month and none the next. Underwriters average several months of bank statements and look for a pattern of draws rather than a smooth daily flow. Advances are almost always remitted by fixed ACH debit, often weekly, because there is no card volume to split.

Other points funders check

• Customer concentration. One general contractor or one developer paying most of the revenue is a risk if that relationship ends.
• Liens and disputes. Open mechanics liens, payment disputes or pending litigation can stop a file.
• Licensing. Many states license contractors by trade. An active license supports the file.
• General contractor or sub. Subs sit further down the payment chain and wait longer. GCs carry more project risk.
• Tax liens and payroll taxes. Fast-growing contractors sometimes fall behind on payroll tax deposits, which funders flag.

For trades that work mainly on homes, such as HVAC, roofing and plumbing, see the separate page on home services MCA leads, since their cash flow looks quite different from commercial construction.

How should you filter and work construction MCA leads?

Filter on revenue and time in business first, then reach the owner early. Contractors are on job sites most of the day, so the best call windows are early morning before crews start or late afternoon after the site closes.

On the call, ask about the job. "What project is this for, and when is the next draw?" tells you the use of funds, the timeline and whether the merchant understands their own cash cycle. Make clear that the funder is buying part of the company's future receivables, which is different from lending money, and walk through the weekly remittance. Our guide to choosing an MCA lead provider explains what to ask a supplier before you order a sector this specialized, and the pricing page lists published prices for real-time and aged leads.