HOW SPM WORKS WITH LENDERS: THE FILE IS DECIDED BEFORE THE MEETING.
A banker reviewing a construction subcontractor reads six things: current ratio, working capital, debt service coverage, AR aging and concentration, the revenue trend and a WIP schedule that reconciles to the balance sheet. Banks commonly target a current ratio above 1.5 and a debt service coverage ratio above 1.25. None of those can change inside a meeting. They change across the two or three quarters before the application. When a lender brings a borrower to SPM, SPM updates that file every month and the bank makes the credit decision.
This page is for bankers and lenders with construction subcontractor borrowers. It covers the signs that a borrower will be hard to underwrite, how the work goes from the first call, and what the lender gets back.
WHAT IT MEANS.
When a banker or lender brings a construction subcontractor borrower to SPM The Construction CFO, SPM produces current internal financial statements, a WIP schedule that reconciles to the balance sheet and a 13 week cash forecast for the credit file, and the bank makes the credit decision.
The borrower remains your customer and the bank makes the credit decision. SPM updates the records every month.
FIVE SIGNS A BORROWER WILL BE HARD TO UNDERWRITE.
The borrower applied without knowing what the bank reads
A banker reads a specific set of ratios and documents. A borrower that walks in with last year's tax return and hopes for the best has no answer for the questions that decide the file.
The statements read as unexplained items
Overbillings read like unexplained liabilities, underbillings like questionable assets, and retainage receivable like something unusual. When those items are not explained up front, the banker assumes the worst, and that assumption is priced into the terms.
The WIP schedule does not reconcile to the balance sheet
A WIP schedule built from a different cutoff than the books leaves the overbilled and underbilled totals unexplained. A schedule that reconciles lets the banker connect the work to the balance sheet.
The line is always drawn and nobody can state the repayment
A line that never returns to zero is a term loan being used as revolving debt. Every draw needs a repayment event: the pay application collection, the delayed retainage release or the mobilization that front-loaded a job.
The application comes in the week the money is needed
Urgency is a data point, and a poor one. Banks approve credit for businesses they know, and the work that earns approval happens in the quarters before the request.
WHAT IT LOOKS LIKE IN DOLLARS.
Banks commonly target a current ratio above 1.5 and a debt service coverage ratio above 1.25. Debt service coverage is net operating income divided by total debt service.
A single customer above 30 to 40 percent of receivables is a concentration a banker flags. The AR aging report is read with the concentration next to it.
This is a common size for a working capital line. A $5M contractor typically qualifies for and benefits from a $500K to $750K line.
FROM THE FIRST CALL TO THE CREDIT FILE.
The contractor books the call from the scheduling page. Josh asks about cash, job costing and margins. Nothing is sold on that call and nothing is proposed.
When SPM can help, the contractor books a longer second call. The proposal covers the scope for that contractor and the published monthly rate for its revenue band.
SPM migrates the books and builds the file a banker reads: current statements with a short note on overbillings, underbillings and retainage, a WIP schedule reconciled to the balance sheet, an AR aging that shows each customer's share of receivables and a 13 week forecast. Each draw on the line has a draw week, an amount and the week the collection repays it.
The month is closed on a schedule, the WIP schedule is built from job cost, and the owner meets with SPM once. The meeting ends in decisions with dates. The owner's own time is about five hours a month.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Up to $1M | $1,900 to $2,900 | $1,000 |
| $1M to $3.5M | $2,600 to $3,900 | $1,500 |
| $3.5M to $6.5M | $3,800 to $5,700 | $3,000 |
| $6.5M to $9.5M | $5,100 to $7,100 | $4,500 |
| $9.5M to $12.5M | $6,100 to $8,500 | $6,000 |
| $12.5M to $15.5M | $7,400 to $11,000 | $7,500 |
| $15.5M to $18.5M | $9,400 to $13,500 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
You stop touching the books.
Everything in Core, and we do the bookkeeping and the controllership as well. Your office stops answering coding questions and stops fixing a reconciliation that will not balance on the last day of the month.
We do the books. No payroll.
Every job shows its margin while it is still open.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the books, the job costing, and the software. No payroll.
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