4 MCA LOANS. 60 DAYS. DEBT-FREE.
A $3.4M civil contractor came to SPM carrying four merchant cash advance loans and a maxed line of credit. Equipment was mobilizing on a new job with no cash to fund the gap. Within 60 days, all four MCAs were eliminated, AR collections recovered six figures, and payroll was covered without owner intervention for the first time in over a year.
WHERE THIS CONTRACTOR STOOD.
A $3.4M civil contractor — grading, drainage, and site prep for commercial developers — came to SPM in the second half of 2024. The owner had been running the company for 11 years. Crew of 18. Four active jobs. Solid reputation with three repeat GCs.
On paper, the company was profitable. The P&L showed margin. The bank account told a different story. Four merchant cash advance loans were being repaid at a combined $2,100 per day in automatic ACH withdrawals. The line of credit was nearly maxed. Equipment needed to mobilize on a new $900K site prep job in three weeks — and there was no cash to fund the startup costs.
The owner had been running on fumes for seven months. Every Friday was a math problem: does payroll clear? He hadn't drawn a salary in four months. He was the only person who knew how bad it was.
WHAT THE OWNER WAS EXPERIENCING.
Cash showed up in waves — then disappeared before the next job's costs hit. The P&L looked fine on a quarterly basis. Monthly was unpredictable. Week-to-week was white-knuckle.
He knew he had four MCA loans. He didn't know his true AR aging. He hadn't looked at it in months because looking at it made it real. There were jobs on the aging that had been sitting for 90+ days — work he'd completed, invoiced, and essentially written off in his head. He didn't know which jobs were making money and which weren't. The job that took on the first MCA loan had looked like a good one going in.
Every new job made the situation worse. More mobilization costs to fund. More ACH withdrawals hitting the account. More cash out the door before the first pay app even got submitted. The business was growing — and the growth was actively draining him.
WHAT CFOS FOUND.
The diagnosis was a Cash Control System failure compounded by a working capital sizing problem. Three mechanisms were stacked:
Mechanism 1 — Mobilization Cash Gap. Civil mobilization costs front-load before any pay app billing. Equipment rental, fuel, labor, and subcontractors all hit in week one. The SOV wasn't structured to recover those costs early — mobilization was bundled with earthwork billing that didn't clear until month two. The company was funding a 60-day gap on every new job from operating cash.
Mechanism 2 — AR Aging Bleed. Three customers on the aging report were past 90 days. Nobody had called them with a structured collection process. The combined value was $214,000 — money owed for completed work that was sitting uncollected because following up felt uncomfortable. Meanwhile the MCA was withdrawing $2,100 per day.
Mechanism 3 — MCA Compounding. Each new MCA loan taken to cover a cash gap reduced the working capital available for the next job. Four MCAs meant four daily ACH withdrawals pulling from operating cash before the owner could see payroll, suppliers, or equipment costs. The debt was self-reinforcing. You can't get out of MCA debt by taking another MCA. See how the Cash Control System addresses this →
WHAT CHANGED AND WHEN.
Pulled the full AR aging report. Identified $214,000 in receivables past 90 days across three customers. Made structured collection calls with the owner present. Collected $127,000 within the first 10 days — two customers paid immediately when contacted with documentation. Established a billing cut-off calendar so pay apps go out within 5 days of every month end, regardless of GC schedule.
Restructured the SOV on the new $900K site prep job to front-load mobilization recovery. Added a stored materials billing line and a site preparation milestone that could be billed in week three instead of month two. Recovered $68,000 in early billing on the new job that would have come in 45 days later under the original SOV structure.
With $195,000 in new cash in from collections and restructured billing, paid off the two smallest MCA loans in full. Eliminated $840/day in ACH withdrawals. Used the freed-up daily cash flow to accelerate payments on the third MCA. Opened conversations with the existing bank about a properly-sized line of credit using the new WIP schedule as documentation — first time the company had a formal WIP prepared.
Paid off the remaining two MCA loans. All four eliminated. Set up ControlQore with job-specific cost codes aligned to the estimating structure. First monthly close delivered within 10 business days. Owner saw actual vs budget on every active job for the first time — in real time, not at year end.
WHAT ACTUALLY HAPPENED.
Time to headline outcome: Total time from first call to all four MCAs eliminated and daily ACH withdrawals stopped: 60 days.
DO YOU RECOGNIZE THIS STORY?
Civil contractors who end up in MCA debt usually share the same three patterns. If any of these describe your business, the failure chain may be identical:
The good news: the failure chain that caused this is fixable. The Cash Control System addresses all three mechanisms — AR collection, billing structure, and working capital sizing — in the first 60 days. See how CFOS applies to civil contractors specifically →
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