Key takeaways
- Supplier terms are the cheapest money available. Ask for net-30 or net-60 before you pay for funding.
- Working capital funds materials in 1–3 days when terms aren't an option.
- A mobilization deposit from your customer solves the problem for free. Most contractors never ask.
- If you float materials regularly, that carrying cost belongs in your bid.
Try these before you borrow
1. Ask your supplier for terms
Supply houses extend credit to contractors who buy consistently. Net-30 costs nothing and often covers the entire gap. If you've been paying COD for a year, you've likely earned an account. Ask for a credit application.
2. Ask for a mobilization payment
A deposit covering materials at the start is standard on many jobs. Writing it into the contract prevents the crunch before it happens. Even 25% up front on a $60,000 job is $15,000 you don't need to finance.
3. Ask for a materials draw
On progress-billed jobs, a stored-materials draw lets you bill for materials delivered to the site before they're installed. Many GCs allow it if you ask up front.
When you do need funding
| Option | Speed | Best when |
|---|---|---|
| Working capital | 1–3 days | You need to buy now and repay as the job pays |
| Invoice factoring | 1–5 days | Another completed job is already invoiced and unpaid |
| Line of credit | Same day, if open | You set it up before you needed it |
| Supplier credit | Days to set up | Always the first ask. Usually free |
Does the job carry it?
Take a $60,000 job needing $20,000 in materials, with about $18,000 of profit. Funding that $20,000 at a 1.25 factor rate means $25,000 back, so the cost is $5,000. Your profit drops to roughly $13,000, and you got the job done.
That works. What doesn't work is a $60,000 job with $6,000 of profit and a $5,000 funding cost. Then you've worked a month for $1,000 and taken all the risk.
Run it first. Put the numbers into our funding calculator before you commit. If the margin is thin, renegotiate the terms with your customer instead of financing the gap.
Price the gap into your bids
- Know your cash cycle. If you pay for materials on day 1 and get paid on day 75, that's 75 days of carrying cost.
- Add it to the bid. Whether it shows as a line item or sits in your margin, it should be in the number.
- Charge for speed. If a customer wants an immediate start, a deposit is a fair condition.
- Watch material price swings. Quotes expire. Lock pricing or include an escalation clause on longer jobs.
Need materials money this week?
Apply in about 5 minutes with 4 bank statements. We'll compare your options and tell you honestly whether the job can carry the cost. Free to apply, no obligation.
Materials funding FAQ
Can I get funding for a specific materials purchase?
Working capital isn't tied to a specific purchase, so you can use it for materials, payroll, or anything else the business needs. Amounts are based on your deposits, not on the invoice you're covering.
Is a credit card cheaper for materials?
It can be, if you clear the balance within the grace period and have the limit available. Carried month to month at high interest, on top of cash advance fees, it can end up costing more than short-term funding. The deciding factor is how fast the job pays you back.
What if my supplier won't give me terms?
Ask what it would take, since it's usually a few months of consistent purchases or a credit application with references. In the meantime, funding covers the gap, and terms are worth pursuing for the next job.
How fast can I get it?
Often 1–3 business days after approval. Apply in the morning with PDF statements ready. See payroll funding for tips on moving fast.
✓ Reviewed by the Funding Expansion contractor funding team · Last updated September 2026
Sources
- California Contractors State License Board: contract and down payment rules for licensed contractors
- U.S. Small Business Administration: lines of credit and loan programs
- California Department of Financial Protection and Innovation: commercial financing disclosures
General information only, not legal, tax, or financial advice. Down payment and contract rules vary by state; check your state licensing board before setting deposit terms. Examples are illustrative; actual rates and costs vary by funder and qualification. Funding Expansion is a commercial funding broker, not a lender.