How we make money: The Business Funding Club is a referral service, not a lender and not a broker. We refer businesses that ask for capital to ROK Financial. ROK and the lenders it matches you with make every funding decision. ROK pays us when a business we refer receives funding. It is free to you, and nothing here is an offer of credit. Read the full disclosure.

Illustration of a construction site with an excavator, rebar and materials waiting on pallets

For contractors

Payroll goes out every Friday. The pay application clears once a month. A line of credit sits in between.

A contracting business carries labor and material until the owner and the general contractor pay. On a federal fixed-price job, progress payments are made monthly as the work proceeds[1]. This page is about a line of credit for that gap. The Business Funding Club is a free referral club, not a lender, that sends contractors to ROK Financial.

Start your application

A referral club, free to apply. ROK Financial and its lenders review every request and make all funding decisions. How we’re compensated.

Prefer to go straight to the funder? You can apply on ROK's own site. It carries our referral ID.

The math

The math

  1. EVERY WEEK

    You pay the crew

    Wages go out weekly, and material is bought before it is installed. None of it waits for the owner.

  2. MONTH END

    You bill the work

    A federal fixed-price construction job bills monthly as work proceeds, and part of a payment can be held if progress is not satisfactory[1]. A sub's money passes through the prime first.

  3. CLOSEOUT

    You collect the retainage

    Federal rules let a prime contractor retain a specified percentage of each progress payment to a sub[2]. That money comes at the end of the job.

The bigger the contract you win, the more labor and material you carry before the money catches up. A line of credit is one way to carry it without pulling cash from the next job. That is a growth tool, not a rescue.

By Marcus L. Barber, Publisher · Reviewed by Marcus before publishing · Updated · How we write and check facts

First: this is credit for the contracting business, not a construction loan

Building something for yourself?

A construction loan pays to build a specific property and is tied to that property. This page is about a revolving line for the contracting company itself: payroll, material and the wait between pay applications. For how contractors get paid, start with our construction page.

How draws work against a construction pay cycle

A line of credit lets you draw what you need, repay it, and draw again[3]. ROK describes a revolving line that charges interest only on funds used[3]. For a contractor, that maps to the job cycle. A line of credit lets you draw for payroll and material and repay as pay applications are paid[3].

  1. Draw for the first weeks of labor and the material order on a new job.
  2. Bill the work completed at month end on your pay application.
  3. Repay from the payment when it clears, less any retainage held.
  4. Draw again for the next month or the next job.

Some lines are secured by receivables and inventory, and the amount you can draw moves with the value of those assets[4]. Our business line of credit page explains the general structure.

Pay-when-paid timing and retainage

If you are a sub, your money comes through the general contractor. On federal jobs, the prime contract must require the prime to pay its subs for satisfactory work on a set schedule once the prime itself has been paid[2]. Private jobs follow the contract, and state jobs follow the contract and the state's own statute. Read both before you count on a payment date.

The same federal clause lets the prime, or a sub at any tier, retain a specified percentage of each progress payment[2]. Retainage is money you have earned but cannot collect until closeout. While it is held, your payroll and supplier bills keep their own schedule.

Ask a lender whether retainage receivable counts toward what you can draw, since it pays later. List it as its own line on your receivables aging, so nobody mistakes it for money that is due this month.

When a line fits, and when another tool fits better

Three tools for a contractor's cash, compared in general terms
ToolBest forWatch for
Line of creditPayroll and material between pay applications, used again and again[3]Using it for a machine you will pay off over years
Equipment financingAn excavator, truck or lift you will use for yearsUsing it to cover a payroll gap
Invoice and receivables financingLarge balances owed by creditworthy customers; the review leans on your customers[4]Retainage and disputed amounts may not count

To size a line, start with the gap itself. Our cash gap calculator estimates how much cash it takes to carry your costs until customers pay.

SBA also has a Contract CAPLine, which finances the costs of one or more specific contracts and may be revolving or non-revolving[5]. Lenders make those loans, not SBA.

What ROK will want to see from a contractor

ROK's partner application lists at least 4 months in business and at least $10,000 in monthly gross sales[6]. Lenders commonly look at credit history, cash flow, equity and collateral[5]. Credit is one input among several. Have these ready:

  • Twelve months of business bank statements.
  • Your current contracts and recent pay applications.
  • A receivables aging with retainage receivable on its own line.
  • Your contractor license and proof of insurance.
  • Current debts, including equipment and truck notes.

ROK Financial and the lenders it matches you with make every funding decision.

These are what lenders commonly review, not a promise of any outcome. The Club does not make funding decisions.

Financing that fits this kind of gap

Which one fits your business, if any, is a conversation to have with ROK’s advisor once they have seen your file. These are the types that usually come up.

Common questions

How does a line of credit work for a contractor?

A line of credit lets you draw what you need, repay it, and draw again[3]. A contractor typically draws for payroll and material during the month and repays as each pay application is paid[3]. The cycle then repeats on the next job, so one line can carry several jobs in turn.

Is a contractor line of credit the same as a construction loan?

No. A construction loan pays to build a specific property and is tied to it. A contractor line of credit is for the contracting business itself: crew payroll, material orders and the wait between billing and payment. If you are building your own shop or yard, that is a different conversation.

Does retainage count when a lender sizes a line?

It depends on the lender. Retainage is earned but not collectible until closeout, and on federal work the prime may retain a specified percentage of each progress payment[2]. Some lenders count retainage receivable and some will not. Show it as its own line on your receivables aging and ask.

What do lenders look at for a contractor line of credit?

Lenders commonly look at credit history, cash flow, equity and collateral[5]. For a contractor, twelve months of bank statements, current contracts, pay applications and a receivables aging tell most of the story. Add your license, insurance and a list of current debts.

Is The Business Funding Club a lender?

No. The Business Funding Club is a referral service, not a lender and not a broker. We refer businesses that ask for capital to ROK Financial. ROK Financial pays the Club when a business the Club refers receives funding. There is no cost to your business, and nothing on this page is an offer of credit.

Sources

  1. FAR 52.232-5, Payments Under Fixed-Price Construction Contracts Acquisition.gov (U.S. General Services Administration), checked October 16, 2026
  2. FAR 52.232-27, Prompt Payment for Construction Contracts Acquisition.gov (U.S. General Services Administration), checked October 16, 2026
  3. Revolving Business Line of Credit ROK Financial, checked October 16, 2026
  4. Comptroller's Handbook: Accounts Receivable and Inventory Financing Office of the Comptroller of the Currency, checked October 16, 2026
  5. SBA lender resources: Partnering with SBA loan programs U.S. Small Business Administration, checked October 16, 2026
  6. Business Financing application (ROK Financial partner page) ROK Financial, checked October 16, 2026

Before you start

What ROK looks for.

Stated plainly so you don’t spend time on a form that isn’t built for your business yet. These are the minimums ROK lists on its partner application. Meeting them is the starting line, not a decision.

  • 4 monthsminimum time in business
  • $10,000minimum monthly gross sales
  • U.S.based and operating

Credit history is one input among several. ROK reviews the whole picture: revenue, deposits, time in business, and what the money is for. What to have ready.

Start your application

A referral club, free to apply. ROK Financial and its lenders review every request and make all funding decisions. How we’re compensated.

Prefer to go straight to the funder? You can apply on ROK's own site. It carries our referral ID.

Plainly

What we are, and what we are not.

We are a referral club. We introduce small businesses to ROK Financial. That's the whole service, and it's free to you.

We are not a lender and not a broker. We don't fund anything, we don't quote figures, and we don't negotiate on your behalf. If someone tells you what your financing will look like before ROK has reviewed your file, that person is guessing.

We are paid by ROK, not by you. When a business we refer gets funded, ROK compensates us. You are never charged a membership fee or an application fee, by us or by anyone acting for us. Full disclosure here.