The short answer
Why contractors end up stacked
A subcontractor submits a pay application at the end of the month. The general contractor approves it, holds retainage, and pays 30 to 60 days later. Materials, equipment rental and crews are paid long before that. An advance fills the gap on one job. Then the next job starts before the first one pays, and a second advance appears. A third covers a slow-paying owner.
Each advance made sense alone. Together, the daily debits can exceed what collected billings support. MFE on construction MCA refinance covers how these files are reviewed.
Who it fits, and who it does not
Fits: commercial trades like electrical, plumbing, HVAC, concrete, roofing and site work on commercial or public projects, with steady deposits and existing advances paid on time.
Harder or restricted: residential remodeling and new residential construction. Many funders restrict them, so an offer cannot be promised.
Does not fit: a contractor whose backlog is drying up, or one with disputed pay apps. A refinance spreads payments out. It does not fix a job that will not pay.
Check what your business qualifies for
Merchant Fund Express reviews construction mca refinance requests from $5,000 to $5,000,000. Scores from 500 are considered, and same-day decisions are common on complete files.
Check funding options with Merchant Fund ExpressHow it works
- List every open advance with funder, remaining balance and payment.
- Send 3 to 4 months of business bank statements, ID, a voided check and the application. Larger requests may need financials or tax returns.
- Include a short backlog summary: active jobs, contract values, expected pay dates.
- If approved, the new advance pays off the old positions directly.
- One payment replaces the stack.
If a single position is the issue, see MCA refinance. If you are paid by commercial customers on invoices, also read invoice factoring vs MCA.
Illustrative example: a commercial electrical subcontractor
Illustrative example. These figures are illustrations to show the arithmetic, not offers. Real pricing, terms and amounts come only from a reviewed application.
Assumptions: about $150,000 a month in deposits from progress billing on net-45 terms, 6 years open, credit around 630, three open advances, 22 business days per month.
| Item | Before | After refinance |
|---|---|---|
| Open balances | $34,000 + $22,000 + $15,000 = $71,000 | Paid off |
| Payment | $900 + $650 + $500 = $2,050 per business day | $2,153.33 per week for 60 weeks |
| Monthly outflow | $2,050 x 22 = $45,100 | $2,153.33 x 52 / 12 = $9,331.11 |
| New advance | $95,000 at a 1.36 factor = $129,200 | |
| Fee | $1,900 | |
| Net cash received | $95,000 minus $71,000 minus $1,900 = $22,100 |
The trade-off is plain: monthly outflow drops by about $35,769 and $22,100 arrives for materials on the next job. In exchange, the contractor will repay $129,200 instead of the $71,000 left on the old advances. The new advance is about 0.63x of monthly deposits.
Funding brings customers. Is your website ready for them?
General contractors and property managers vet subs online before they send bid invites. A site with your trade, license details, service area and photos of finished commercial jobs gets you on more bid lists once the cash pressure eases. Cheap Cheap Websites builds professional contractor sites from $399, with Website Care at $30/month to add new project photos as jobs close out.
What to prepare
- 3 to 4 months of business bank statements.
- Payoff letters for each advance.
- Backlog list with contract values and expected payment dates.
- Aging report of open pay apps and retainage held.
- ID, voided check, application. Financials or tax returns for larger amounts.
When another option is better
If your next big cost is a machine, equipment financing with a term matched to its life keeps it out of your daily cash. If most of your stress is one slow general contractor, factoring real, undisputed invoices may be cheaper than refinancing everything. If retainage is about to release on a large job, waiting a few weeks may let you pay down a position instead. Industry overview: construction business funding.
Related funding guides
Cheap Cheap Websites builds websites. It does not lend or make funding decisions. Funding is offered by our funding partner, Merchant Fund Express, and every request is subject to its review and approval. Figures on this page are illustrations, not offers. Updated October 15, 2026.