Progress draws every 30 to 60 days. MCA debits every business day. We close the gap.

Construction sees stacked business debt across MCAs, bank lines of credit, equipment finance, and vendor and supplier debt. Each layer has its own enforcement playbook and its own cash flow risk.

The first reason is progress payment timing. A residential remodel GC might submit a draw at 30 percent completion, wait 21 days for inspection and approval, and then wait another 14 days for the wire to clear. That is a 35 day cycle on a single draw. Meanwhile the daily MCA debit has hit 25 times. Bank LOC payments are monthly. Equipment finance on the bobcat and the dump truck is monthly. The math only works when the draw cycle is faster than the daily debit accrual, and it almost never is.

The second reason is bank LOC concentration. Most established contractors run on a bank LOC for working capital. The LOC funds mobilization, materials, and labor during the gap between project start and first draw. When draws slip and the LOC runs to its limit, the contractor stacks an MCA or two to bridge the next project. The bank LOC then hits its covenant threshold, and a bank workout becomes the urgent issue while the MCAs keep debiting.

The third reason is non-paying GCs and vendor cascade. A single GC slow-paying or stopping payment on a $200,000 receivable can take down a sub. The sub stacks MCAs to keep the crew paid and the next project moving. Material suppliers, who were already running 30 to 60 day terms, see the activity and tighten credit, sometimes filing mechanic's liens. Vendor debt then becomes a parallel workout to the MCA and bank exposure.

The fourth reason is heavy equipment finance. Bobcats, dump trucks, excavators, bucket lifts, and specialty equipment are usually financed through equipment lenders at $80,000 to $400,000 per piece. A typical mid-sized contractor carries $500,000 to $2 million of equipment finance. When cash tightens, equipment payments compete with everything else, and acceleration on one piece can cross-default the whole equipment portfolio.

The fifth reason is bonding capacity sensitivity. Sureties review the contractor's credit profile, working capital, and outstanding liabilities before bonding the next project. A stacked MCA position, a covenant violation on a bank LOC, or an equipment acceleration all show up in the surety review and shrink bonding capacity at exactly the moment the contractor needs more bonding to take on better work.

The sixth reason is material price volatility. Lumber, steel, copper, and concrete pricing can move 20 to 40 percent in a single quarter. When suppliers demand deposits and prices spike mid-project, the contractor either eats the loss or stacks an MCA or LOC draw to bridge the gap.

Construction MCA cases share a recognizable shape, and the timing usually traces back to either a non-paying GC or a single oversized mobilization.

• Stack count: 3 to 5 active MCAs, with 6 or 7 on heavier cases
• Time to stack: 12 to 24 months from first advance to landing on our desk
• Factor rates: 1.30 to 1.45 across most cases
• Daily debits: $800 to $3,000 in combined daily withdrawals
• Average face balance: $400K to $850K combined
• Trigger event: Either a single non-paying GC, an oversized mobilization on a project that ran long, or a material price spike on a fixed-price contract

The bonded contractor cases are different from the unbonded cases. Bonded contractors usually have stronger credit profiles, slower stacking patterns, and a higher average debt size. Their programs lean toward restructure rather than settlement because the credit profile preservation matters more.

The unbonded cases are typically smaller residential GCs, remodelers, and trade subs. Their stacking patterns are faster and their settlement leverage is higher because they have less to lose from a credit profile event.

Construction cases get a draw-cycle-aware approach because the cash flow shape is so different from other verticals.

Step one: bonding and credit profile review. At intake, we identify whether the operator is bonded and how active the surety relationship is. If bonding is active, the program is designed to preserve the credit profile the surety reviews. That usually means leaning toward restructure rather than settlement on the largest advances.

Step two: draw calendar mapping. We map the operator's actual draw calendar across active and pipeline projects. Settlement and restructure payments are then sequenced to fall after major draws clear, never before. This is the core difference between a construction program and a generic MCA program.

Step three: lien and subcontractor protection. Subcontractor payments stay current through the program. Mechanic's lien rights and notice deadlines are protected. Where the operator has lien rights against a non-paying GC, we sequence the MCA work to preserve those rights.

Step four: parallel reconciliation. Reconciliation requests go to all active MCA lenders simultaneously. The daily debit usually pauses within 3 to 6 weeks of the first reconciliation, slightly longer than other verticals because lenders sometimes contest reconciliation in construction cases.

Step five: surety coordination where applicable. If a major project requires a new bond during the program, we coordinate with the surety in advance. The program timing can be structured around bonding deadlines so the next project does not get blocked.

Contractor: Residential remodel GC, 12-year history, average project size $150K to $400K, operating in two metro markets with a crew of 8 plus 12 active subs.

Stack at intake: 4 active MCAs with combined face balance of $590,000. One reverse consolidation lender. Average daily debit total: $2,650.

Trigger event: A custom kitchen and bath remodel ran 11 weeks long on a fixed-price contract due to permitting delays and a backordered Wolf range. The contractor took the first MCA to fund the overrun. Three more stacked over 14 months as a single GC stopped paying on a $180,000 receivable and the contractor's bond renewal got tight.

Program: Restructure on the largest advance to preserve bonding profile. Settlement on the other 3, including the reverse consolidation. Reconciliation requests filed in week 2. First settlement closed in month 5 at 41 cents. Reverse consolidation unwound in month 7. Restructure on the largest advance ran through month 13.

Outcome: Total payback of $313K against $590K face balance. Daily debits reduced from $2,650 to a single $11,500 monthly restructure payment. Program closed in 13 months. Bonding capacity preserved. Contractor restored to a $400K project size in month 14.

Construction MCA cases come with industry-specific risks that the operator should understand before starting a program.

Bonding non-renewal. A surety review during the program can result in reduced bonding capacity or non-renewal if the credit profile moves the wrong direction. We design the program to protect the bonding relationship, but the operator should understand that bonding is sensitive to any change in the financial picture.

Mechanic's lien filings against the contractor. If subcontractors or suppliers feel their payments are at risk, they can file mechanic's liens against the contractor or against the active project. The program is designed to keep sub and supplier payments current, but the operator has to be transparent at intake about any sub or supplier relationships that are already strained.

Subcontractor payment chain breakage. When a contractor's cash flow tightens, the temptation is to defer sub payments. That breaks the chain. Subs find other GCs and the operator loses the labor that makes the next project possible. The program is built around keeping sub payments on time.

License renewal timing. Contractor licensing varies by state and includes financial and insurance requirements that have to stay current. We sequence the program around renewal dates so license status is never at risk.