A Zanesville, OH contractor has to pay for lumber, cabinets and crew time before the customer draw arrives. Two contractor financing options fit: a line of credit, drawn when a supplier invoice comes due and paid down when the draw clears, and working capital for payroll on longer jobs. Rushstead puts the job in front of funding partners; whether to fund, and at what cost, stays with each of them.
How a Muskingum County, OH builder or remodeler covers materials and payroll between draws, with an invented kitchen job worked day by day and building-contractor counts from County Business Patterns 2023.
Why customer draws arrive after materials are bought
A residential job pays on a schedule tied to finished work: a deposit at signing, then a draw when the rough-in passes inspection, another when cabinets and tile are in, and the last at the walk-through. The supplier works on a different calendar. Lumber is paid when it is delivered, cabinets are paid when they are ordered, and the crew gets paid every other Friday whether or not the inspector came. The contractor carries the difference.
Illustration only, invented figures: a remodeling contractor signs a $52,000 customer kitchen and bath job in Zanesville, OH with the four-step draw schedule above. The request covers the contractor's materials and payroll, not the customer's building work. By day 24 the job has paid out $29,900 for materials and one payroll and has taken in only the $5,200 deposit, so $24,700 of the contractor’s own cash is in the job before the first draw of $18,200 lands.
| Day | What happens | Cash out | Cash in |
|---|---|---|---|
| Day 0 | Signing deposit (10%) | $5,200 | |
| Day 2 | Framing lumber and sheathing | $9,800 | |
| Day 9 | Cabinets ordered (supplier wants payment) | $11,400 | |
| Day 14 | Crew payroll | $4,100 | |
| Day 20 | Tile, backer board and fixtures | $4,600 | |
| Day 24 | First draw after the rough-in inspection (35%) | $18,200 |
Small builders feel this most. In Muskingum County, OH, residential building construction had 30 employer establishments in the 2023 County Business Patterns, and 26 of them, 86.7%, ran with a payroll of under five people. A firm that size seldom has a second job paying in at the right moment to cover the first one.
Nonemployer Statistics put a separate figure on the owner-only side: 178 residential building businesses with no paid employees in Muskingum County, OH in 2024. For a one-person builder, the deposit and the first draw can be the only cash in, so each supplier invoice ahead of the draw is paid from savings or from borrowed money.
Credit line draws for lumber, roofing and supplies
A business line of credit fits the gap in the table because the gap is short and has a known end. The contractor draws when the cabinet supplier wants payment, and the first customer draw pays the balance back. Interest runs only on what is drawn and only while it stays out, which matters on a job where the gap closes in a couple of weeks.
Illustration only, invented figures: suppose the contractor pays the lumber and the first payroll from the deposit plus $8,700 of its own cash, then draws $11,400 on the line on day 9 for the cabinets and $4,600 on day 20 for tile, at a 12.5% annual rate. Both draws are repaid from the first customer draw on day 24. Fifteen days on the cabinet money and four on the tile money come to $64.86 in interest (simple daily interest, our arithmetic). After the line is cleared, $2,200 of the $18,200 draw is left for the next stage.
The same line serves roofing and siding jobs, where shingles, underlayment and flashing are bought before a tear-off starts. County Business Patterns showed 9 roofing contractor establishments in Muskingum County, OH in 2023, and 19 plumbing, heating and air-conditioning contractors, trades that buy equipment and fittings ahead of the job in much the same way.
- Draw for one invoice at a time, and write the job name on each draw.
- Repay from the matching customer draw before spending the rest of it.
- Keep the line for materials and short gaps, not for a truck or a tool trailer.
- Check whether the partner charges a fee for each draw or a yearly fee on the line.
Working capital for crew payroll on longer jobs
Materials are only part of a long job. On a long customer contract that runs four months, the crew is paid many times before the last draw; the contractor can request materials and payroll rather than the building work itself. Count the Fridays: a 120-day job spans 8 or 9 biweekly paydays, the number set by the date of the first one. At $5,600 a payday (invented), that is $44,800 to $50,400 of payroll across the job, and on a retainage contract part of the customer’s money is held back until the end.
Working capital suits that kind of steady, months-long cost, because it arrives as one sum and is repaid on a fixed schedule rather than drawn and paid down. Illustration only, invented figures: a $30,000 working capital loan over 18 months at a 13.5% annual rate means 18 payments of $1,850.43, or $33,307.74 across the term, so the borrowing costs $3,307.74 in interest. The contractor can set that cost against the job’s margin before signing.
A line and a working capital loan can sit side by side: the line for supplier invoices that come and go, the loan for payroll through a long job. A partner can look at both against the same bank statements, so the request should say which money is meant for which cost.
Job contracts and draw schedules in the funding file
A funding partner looking at a contractor wants to see where the money comes back from. The job paperwork shows that better than a revenue total does. Items that tell the story of a draw-based job:
- The signed contract with the job price and the customer’s name.
- The draw schedule, with the stage that triggers each payment.
- Recent pay applications or invoices to customers, and the dates they were paid.
- Supplier quotes or invoices for the materials the request covers.
- A short list of open jobs: contract value, amount billed, amount still to come.
- Bank statements from the last three to six months, where the customer draws can be seen landing.
- Payroll records if the request covers crew wages.
Contractors in Zanesville, OH can see how a partner reads a construction file on the construction industry page, which also covers equipment and trailers. Opening the request is not a credit application. Whether a credit report gets pulled is up to the partner, once it begins its own review. To start, open the request page and list the job, the draw dates and the amount, or browse other posts on the Rushstead blog.
By Rushstead Commercial Capital · Updated
