WHY DEMOLITION CONTRACTORS RUN OUT OF CASH BEFORE THE JOB REALLY STARTS.
Demolition mobilization is front-loaded cost without front-loaded cash. Equipment moves, permits, abatement surveys, hazmat remediation setup, and initial debris haul all occur in the first 7 to 14 days of a demolition contract. The first pay application typically covers that work but does not arrive until day 35 to 45 after submission. A demolition contractor starting two or three jobs per month is constantly funding 30 to 45 days of mobilization costs from cash reserves — or from a line of credit that maxes out when the pipeline grows.
CFOS maps demolition mobilization costs by project against expected first payment dates in the 13-week cash forecast. When the gap between mobilization spend and first payment creates a cash floor breach, the forecast shows it 6 to 8 weeks out — not Thursday morning.
A demolition contractor starting a $400,000 selective demolition job on a commercial renovation project incurs $65,000 in the first two weeks — equipment mobilization and rigging, hazmat abatement contractor, debris haul permits, temporary utility disconnections, and initial dumpster costs. The first pay application covering that work is submitted at the end of week two. The GC approves it by day 30. Cash arrives by day 38 to 45.
From day 1 to day 38, the contractor has $65,000 deployed with nothing collected. On three concurrent jobs at different phases, the total mobilization float can be $150,000 to $200,000 at any given time. Without a 13-week forecast that maps this explicitly, the owner finds out about the cash constraint on the day it hits — not 6 weeks out when there is time to arrange LOC headroom or adjust timing.
Most demolition subcontracts use a simple schedule of values — a percentage of contract broken into phases or time periods. If mobilization represents 18% of the job cost but only 8% of the contract value in the SOV, the contractor is fronting 10% of the contract value before the billing catches up. On a $400,000 job that is $40,000 out of pocket before the billing structure starts recovering the true front-loaded cost.
CFOS reviews the SOV before the contract is signed. When mobilization costs are significantly front-loaded, CFOS negotiates a mobilization line in the SOV that reflects the actual mobilization cost. A $65,000 mobilization cost on a $400,000 contract should be a 16% line on the SOV, not a 5% general conditions allocation.
When demolition scope includes asbestos, lead paint, or other hazmat abatement, the abatement subcontractor typically requires payment within 30 days regardless of when the GC pays. The demolition contractor is caught in the middle: the abatement sub wants payment in 30 days, the GC pays on net 45, and the demolition contractor funds the gap from working capital.
CFOS maps abatement sub payment obligations against expected GC payment dates in the weekly cash forecast. When the gap creates a payment timing problem, CFOS identifies it early — negotiating abatement sub payment terms, arranging LOC coverage for the specific gap, or flagging the issue to the GC for early pay application approval on the abatement line.
FLAT MONTHLY FEE. NO SURPRISES.
Two tiers based on trailing 12-month revenue. No hourly billing. No payroll. No add-ons.
| Revenue | Core Financial | Executive Financial |
|---|---|---|
| Under $1M | $1,900/mo | $2,900/mo |
| $1M–$3M | $2,600/mo | $3,600/mo |
| $4M–$6M | $3,800/mo | $5,500/mo |
| $7M–$9M | $5,100/mo | $6,900/mo |
| $10M–$12M | $6,100/mo | $8,500/mo |
| $13M+ | Quoted | Quoted |
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