Line of Credit · Working Capital · Construction Finance · When to Draw · How to Qualify
Line of Credit · Working Capital · Construction Finance · Bank Relationship · Cash Flow
Construction Line
of Credit.
A working capital line of credit is one of the most useful financial tools a commercial subcontractor has — and one of the most misused. Used correctly, it bridges specific identified cash gaps. Used incorrectly, it becomes permanent debt that masks structural cash flow problems and quietly drains profit through interest. Here's how to use one correctly.
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SPM vs. Other CFO Firms
Most CFO Firms Serving This Trade
- High revenue minimums — most won't serve under $5M
- Advisory only — no bookkeeping, no implementation
- No job costing setup or ControlQore management
- No monthly WIP as standard deliverable
- No pricing published — discovery call required
- No vetted partner network for bonding, lending, or liens
- No prevailing wage specialty
The Construction CFO — SPM
- Serves $1M–$12M — starts at $1,900/month
- Full implementation — bookkeeping, job costing, CFO advisory
- ControlQore setup and managed for you every month
- Monthly WIP standard in Executive tier
- Full pricing published — no discovery call to find out costs
- Vetted partners for bonding, lending, lien services, payroll
- Prevailing wage and Davis-Bacon specialty
What We See in This Business
01
Your Line Is Always Drawn Down
A working capital line that never gets paid to zero is not a line of credit — it's a term loan you're treating as revolving debt. It means your business isn't generating enough cash to fund its own operations between billing cycles. The line is covering a structural cash flow problem, not bridging a temporary timing gap.
02
You Drew on the Line Without a Specific Payback Plan
Every draw on a working capital line should have a specific identified payback event — the pay app collection that triggered the draw, the retainage release that was delayed. Drawing on the line without knowing specifically when and how it gets paid back turns short-term bridge financing into open-ended debt.
03
You Don't Qualify for the Line You Need
Working capital lines for construction subcontractors are sized based on financial ratios — working capital, current ratio, revenue, and AR aging. Most subcontractors don't think about qualifying for a line until they need one urgently. By then, the financial profile may not support the line size they actually need.
How SPM Fixes It
When to Draw on the Line
Draw on the line when: your 13-week cash flow forecast shows a specific gap in a specific week, the gap is caused by a known timing event (GC slow on a specific pay app, mobilization front-loading a new job, retainage release delayed), and you can identify the specific collection event that repays the draw. If you can't identify the repayment event, don't draw.
Qualifying for a Construction Line of Credit
Banks look at: working capital position, current ratio (target above 1.5), debt service coverage ratio, AR aging (concentration risk — no single customer over 30–40% of AR), and revenue trend. SPM maintains the financial profile that supports line qualification year-round. When Executive clients need a line increase or a new facility, the financial package is ready. We also connect clients with our vetted lending partners who understand construction working capital.
The Line Payback Discipline
SPM builds line of credit payback into the 13-week cash flow forecast for Executive clients — identifying the draw event, the draw amount, and the specific week the collection arrives to repay it. When the collection arrives, the line gets paid immediately. Not 'mostly paid.' Paid to zero if the collection supports it. The forecast makes this discipline visible and automatic rather than a judgment call.
Service Tiers
Tier 01
Core Financial
Starts at $1,900 / month
- ControlQore setup and management
- Job costing aligned to your estimate structure
- Cost-to-complete tracking — updated monthly
- Full-service bookkeeping — minimum 30 min/week
- Vendor payments via ACH (you approve, we initiate)
- Accounts receivable management
- Bank reconciliations and transaction matching
- Controllership
- 1 monthly CFO meeting
- 60-day onboarding — books migrated to last taxable year
Most Popular
Tier 02
Executive Financial
Starts at $2,900 / month
- Everything in Core Financial
- Monthly WIP schedule — delivered every month, standard
- 13-week cash flow forecasting
- CEO Report — monthly financial dashboard
- 3 CFO advisory meetings per month
- Strategic accountability and actionable to-dos
- Direct access to Josh Luebker
Pricing by Revenue
Revenue Range
(Last 12 Months) |
Core Financial
Monthly |
Executive Financial
Monthly |
| Under $1M | $1,900 | $2,900 |
| $1M – $3M | $2,600 | $3,600 |
| $4M – $6M | $3,800 | $5,500 |
| $7M – $9M | $5,100 | $6,900 |
| $10M – $12M | $6,100 | $8,500 |
| $13M+ | Quoted | Quoted |
Vetted Partner Network
National Lien Services
When AR gets too long, we connect you directly to our lien services partner to protect what you've earned.
Additional cost — not included in monthly fee
Payroll Integration Partners
Prevailing wage and regular payroll software partners integrated directly with ControlQore job costing.
Additional cost — not included in monthly fee
Bonding Partners
Surety relationships and bonding capacity support. We prepare the financials — our partners get you bonded.
Additional cost — not included in monthly fee
Lending Partners
Working capital lines and equipment financing through vetted lenders who understand construction.
Additional cost — not included in monthly fee
Reviewed Financials
CPA-level financial statement reviews for banking, bonding, and large contract requirements.
Additional cost — not included in monthly fee
CPA Coordination
We work alongside your existing CPA — not replacing them. Clean books and job costing make tax time easier.
Included — no extra cost
Common Questions
Straight answers.
How large should a construction working capital line be?
A common benchmark is 10–15% of annual revenue. A $5M contractor typically qualifies for and benefits from a $500K–$750K line. The right size depends on your project cycle — how long between when you spend and when you collect — and your peak working capital gap as shown by the 13-week forecast. Too small a line doesn't solve the gap. Too large a line creates temptation to use it as operating capital rather than a bridge.
What's the difference between a revolving line and a term loan for construction?
A revolving line of credit allows you to draw, repay, and draw again up to the credit limit — designed for recurring working capital gaps. A term loan provides a fixed amount repaid over a fixed period — better suited for equipment purchases or one-time capital needs. For working capital management, revolving lines are the right tool. For equipment, term loans or equipment financing are more appropriate.
What's included in Core Financial?
ControlQore setup, job costing aligned to your estimates, cost-to-complete tracking, full bookkeeping (minimum 30 min/week), ACH vendor payments (you approve, we initiate), AR management, bank reconciliations, transaction matching, controllership, and 1 monthly CFO meeting. Starts at $1,900/month.
What does Executive Financial add?
Everything in Core plus monthly WIP schedule, 13-week cash flow forecasting, CEO Report, and 3 CFO advisory meetings per month. Starts at $2,900/month. WIP, cash flow forecasting, and the CEO Report are Executive tier only.
Do you handle payroll?
No. We have vetted payroll software partners — including prevailing wage integrations — that connect directly with ControlQore. Those are separate engagements at additional cost.
How long does onboarding take?
60 days. We migrate your books to the start of your last taxable year, set up ControlQore, and build your job costing structure. Fully operational in two months.
What software do clients use?
ControlQore. All SPM clients run on ControlQore for job costing and WIP. We set it up and manage it — you don't have to learn it. Clients switching from QuickBooks, Sage, or other platforms migrate during onboarding.
Do you work alongside our CPA?
Yes. We work alongside your existing CPA — not replacing them. Clean books and accurate job costing make their job easier at tax time.
What happens when we grow past $12M?
We have a clear graduation path. We prepare your financials, systems, and team for the transition and connect you with the right firm for your next stage of growth.