Construction owners ask me the same first question every week: how much monthly revenue do we need before anyone will fund us? Fair question! Wrong first question, though. This summer I watched a paving crew doing $75,000 a month and a remodeler four times that size both get funded, on different products, for the same underlying reason. The level of revenue mattered to nobody. The shape of it decided everything: consistent, or trending up.
The question that actually sorts your options is one almost nobody asks: who pays you? A homeowner writing draw checks and a general contractor processing pay apps produce two completely different bank statements. Underwriting reads the statement, not the trade on your business card. So residential and commercial construction walk in the same door and should walk out with different products.
Residential: draw checks on a short clock
Residential work - remodels and ground-up builds sold straight to a homeowner - gets paid in pieces the whole way. Deposit at signing. A draw at demo, a draw at rough-in, the balance at punch list. Money lands every few weeks and the statement shows a rhythm to it.
The spend side is the ugly part. Materials and crew get paid up front, weeks ahead of the draw that covers them, and one stalled inspection can shove every draw behind it to the right. That squeeze is permanent in residential. It is also exactly the cadence a straight advance fits: the payback debits weekly, your deposits land weekly, the two rhythms ride together.
A real file from my desk earlier this summer: a residential remodel and development shop, a decade in, carrying six figures of existing debt. The kind of balance sheet that makes a bank quietly stop returning calls. We shopped it anyway and eight approvals came back, from $75,000 up to $300,000. The one worth signing: $200,000 at a 1.15 factor, paid as $230,800 over 39 weekly debits. That is $30,800 for the money over about nine months. The old debt did not kill that file, the deposit rhythm carried it.
Commercial: the pay app economy
Commercial flips the clock on you. You bill the GC through a pay app, the GC approves on their own schedule, and the money shows up in 30, 60, sometimes 90 days, minus 5 to 10 percent retainage that waits until closeout. I walked through the mechanics of that gap in the construction financing guide. Short version: a commercial sub can be profitable on paper and starved at the account in the same month.
Force a weekly advance onto that statement and by week six you are robbing Peter to pay Paul. The native product for pay-app receivables is a line of credit. Draw when you mobilize. Cover payroll while the pay app sits in approval. Pay the line down when the wire lands, then draw again on the next job.
Two commercial files from my own book this year:
- A plumbing corporation, twelve years in, deposits in the low $90,000s a month, zero business debt walking in. They run a line and pull $20,000 to $30,000 as jobs mobilize, pay it down, pull again - four draws inside four months at one stretch. When a bigger contract called for real capacity, we set a $75,000 straight position on top of the line. The line handles timing. The position handles size.
- An asphalt paving company, seven seasons in, about $75,000 a month while the plants are open. They run the line only: pull about $20,000 at mobilization, clear it as GC checks land. A fixed weekly debit through the off months would fight their calendar, so we never put one there.
What the underwrite actually reads
Underwriters are not Argus with his hundred eyes. On a construction file they look hard at four things, and you can check all four on your own statements tonight:
- Deposit cadence. Regular landings beat one hero wire, even when the totals match. Draws and GC checks that arrive on a pattern read as a business with a pipeline.
- Negative days. Every day the account dips below zero argues against the debit you want it to carry. Keep it to a few across three months and most funders stay in the room.
- Average daily balance against the proposed payment. If the weekly pull is bigger than the cushion that sits in the account, the offer shrinks until it is not.
- Existing debits. Positions already hitting the account get netted out of what you can service. Balances you paid off stop counting against you entirely.
The full statement read gets its own piece in how underwriters read your bank statements.
Pull your last four months tonight and run those four checks. If the rhythm is there, flat or climbing, you are fundable at $75,000 a month and you are fundable at four times that. And if your statement looks spiky because GCs pay you in lumps, the line exists to fix exactly that.