Industry

General contractors funding in Canada: what funders actually read.

The deposit patterns, seasonality and timing that decide how a Canadian general contractors file is read.

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How funders read general contractors files

General contractors carry subcontractor payments, permits and materials before the owner's draw arrives, so cash flow is always a step behind the work.

Draw schedules and how long each draw takes to arrive
The mix of residential and commercial work
Subcontractor payment obligations relative to deposits
Concentration in one or two large projects

The cash-flow rhythm

Exterior work runs on a warm-weather calendar and interior work smooths the winter. Large projects can create one fat deposit followed by weeks of quiet.

Where the pressure usually shows up

Paying subs and suppliers before the draw lands
Change orders that add cost faster than they add billing
Holdback on contracts that releases months after completion

What the money usually does

Materials and mobilization for a new project
Paying subs while a draw is in review
Equipment or a truck
Bridging a large holdback release

A deposit-based structure, sized on total deposits rather than card sales, usually fits better than a card-based advance because most payments arrive by cheque or EFT.

A worked example

Illustrative arithmetic

A renovation general contractor depositing about $95,000 a month asks for $40,000 to mobilize two projects at once. At a 1.24 factor the payback is $49,600, a cost of $9,600. Over roughly 6 months that is about $394 per business day, or close to 9% of monthly deposits.

Total payback: $40,000 × 1.24 = $49,600.
Cost: $9,600.
Payment: about $394 per business day, or 9% of monthly deposits.

Every figure on this page is illustrative arithmetic in Canadian dollars. It is not an offer, a quote or a promise of approval.

Before you apply

Have a short project schedule that shows expected draw dates
Separate contract deposits from owner-injection transfers
Note any large holdback expected to release

Typical starting points

Monthly revenueTypically from around $20,000 a month in deposits for Canadian files. The exact line varies by funder and by file.

Time in businessTypically about 12 months. Newer businesses can be reviewed, but the options narrow.

Account healthLimited low-balance or negative days. Funders read the last few months of bank statements for this.

CreditScores from 500 are considered. A score of 600 or higher opens more options and better offers.

DocumentsA signed application and recent business bank statements, typically the last four months.

Existing advancesFiles with an existing advance can be reviewed, including second position.

Common questions

Does a large lumpy deposit hurt?

A single big deposit is read in context. A schedule that explains it helps.

Is contract holdback the same as an advance holdback?

No. Lien holdback on a contract is a different thing from the percentage taken under an advance.

Can I fund two projects at once?

Yes, if deposits across recent months can carry the payment alongside the new work.

Keep reading

Merchant cash advance CanadaHow an advance against future card sales works Revenue-based financing CanadaRepay a fixed multiple as a share of revenue Cash-flow affordability calculatorCan the month carry the payment?IndustriesHow each trade is read by funders Funding use casesPayroll, inventory, expansion and more Underwriting situationsCredit, NSFs, time in business and more

Educational information only. It is not legal, tax or accounting advice.

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