What funding covers a construction payroll gap?
A payroll gap — the draw lands after the crew has to be paid — is normally covered by revenue-based working capital, a business line of credit, or invoice factoring. Which one fits depends on how predictable the gap is: a recurring, known gap suits a line of credit, while a one-off crunch is usually faster to solve with revenue-based capital.
Which option is fastest?
Revenue-based working capital, generally. It has the lightest documentation requirement and can often fund within a few business days, which matters when the deadline is a specific Friday.
When is a line of credit the better answer?
When the gap repeats. Paying to open a line once and drawing on it each cycle is usually cheaper over a year than taking a separate advance every time a draw runs late. Lines take longer to put in place, so they are set up ahead of need, not during a crisis.
Does invoice factoring work for construction?
Sometimes, but progress billing complicates it — an invoice tied to an uncompleted phase is harder to factor than a delivered-goods invoice. Factoring works best where the billing is clean and the paying party is creditworthy.
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