# 92% of Subcontractors Floated Payroll Last Year. How to Stop Financing the Job Yourself

Published: 2026-10-27 · By Deliver Funding · https://deliverfunding.com/blog/contractor-payroll-cash-gap
Industry: Construction & Trades · Topics: construction, contractors, subcontractors, cash flow, payroll, merchant cash advance, tariffs

> Subcontractors wait an average of 51 days to get paid while payroll comes every Friday and material costs keep rising. What the 2026 data shows, how to close the gap, and when working capital makes sense.

## Key points

- In a May 2026 Siteline survey of 492 construction finance and operations professionals, 92% of subcontractors said they floated payroll out of their own pockets in the past year while waiting to be paid.
- Billd's 2026 National Subcontractor Market Report found subs wait an average of 51 days after submitting a pay application, and 83% of subcontractor owners say they worry about cash flow.
- Costs are climbing too: the producer price index for inputs to new nonresidential construction rose 7.1% from July 2025 to July 2026, according to AGC's analysis of government data.
- Practical moves: price your cost of capital into bids, tighten pay apps and lien deadlines, negotiate supplier terms, and line up working capital before a job needs it.

Every contractor knows the Thursday-night math. The materials are paid for. The general contractor's check is weeks away. Your crew gets paid tomorrow. If you've covered that gap out of your own account, you're in very large company.

## What the 2026 numbers say

**Subs are acting as the bank.** In a May 2026 survey of 492 construction finance and operations professionals, released by Siteline as *The State of Subcontractor Billing in 2026*, **92% of subcontractors said they floated payroll from their own pockets** during the past year while waiting to be paid, and 28% said they did it most months. Forty-three percent waited more than 90 days to collect final payment and retainage, and nearly one in five waited six months or more.

**The wait is long, and GCs underestimate it.** Billd's sixth annual *National Subcontractor Market Report*, based on more than 600 subcontractors, suppliers and general contractors, found subs wait **an average of 51 days** to be paid after submitting a pay application. General contractors estimated 35 days, a 16-day gap. Sixty-four percent of subs said they are slow-paid by their GC, and **83% of subcontractor owners said they worry about cash flow**, up from 71% a year earlier.

**Costs keep moving the wrong way.** The Associated General Contractors of America reported that the producer price index for inputs to new nonresidential construction rose **7.1% from July 2025 to July 2026**, with tariffs on key materials among the drivers. And for the smallest firms, the squeeze shows up in revenue: a May 2026 Joint Economic Committee (Minority) report using Intuit QuickBooks data found construction businesses with fewer than 10 employees lost about 18% of their revenue since April 2025.

Put those together and you get a business that is profitable on paper but short on cash every other Friday.

## Why the gap hits contractors harder

Most businesses get paid when they deliver. Contractors get paid after they bill, after the pay app is approved, after the owner pays the GC, and sometimes after retainage is released at the end of the job. Meanwhile:

- **Payroll is weekly** and can't wait.
- **Materials are paid up front** or on short supplier terms, and late payers often pay more. Billd found 41% of suppliers raise prices, by an average of 9%, on customers who pay late.
- **Growth makes it worse.** A bigger job means bigger material buys and a bigger crew before the first draw comes in.

## Six moves that protect your cash

1. **Price the cost of waiting into your bids.** If a job will take 51 days to pay, money has a cost for those 51 days. Billd found subs who build cost of capital into their bids were more profitable (14.6% vs. 11.7% net margin) and more likely to grow.
2. **Make every pay app clean and on time.** Missing backup, wrong forms and late submissions push you into the next payment cycle. Use a checklist and submit on the first possible day.
3. **Track lien and notice deadlines.** In the Siteline survey, 56% of respondents said they'd missed a critical mechanic's lien deadline in the past two years. Your lien rights are your leverage when payment stalls. Put every deadline on a calendar the day you start a job, and ask an attorney about the rules in your state.
4. **Negotiate retainage and terms up front.** Ask for reduced retainage after 50% completion, and for your largest suppliers to move you to net-30 or net-45. Ask GCs whether they offer early-pay programs; Billd found 28% of subs use them.
5. **Build a 60-day cash forecast.** List payroll, material buys, equipment payments and taxes by date against expected draws. A gap you see a month out is far cheaper to fix than one you see on Thursday night.
6. **Line up capital before you need it.** Billd reported that 42% of subs secured capital before they needed it. Applying when you're not in a rush gives you time to compare options.

## When outside capital makes sense

Funding isn't a fix for jobs that lose money. It makes sense when the money has a **specific job and a clear payback**, such as:

- Covering payroll while an approved pay app or retainage is outstanding
- Buying materials for a new job, or locking in a price before an increase
- Mobilizing crew and equipment for a larger contract
- Repairing or replacing a truck or machine that keeps the crew working

A **merchant cash advance** is one option for these short-term needs. It is not a loan: a funder purchases a portion of your future receivables, and remittances are tied to your revenue. It is usually faster and easier to qualify for than a bank line, but it costs more, so size it to the gap and the payback date, not to the maximum you're offered.

## How Deliver Funding helps

We work with contractors, subcontractors and trades businesses every day. We match you with funding options from **$10,000 to $5,000,000**, consider all credit types, and can deliver a decision in as little as 24 hours, with funding often 24 to 48 hours after approval. Pre-approval doesn't use a hard credit pull.

Typical minimums: about 6 months in business, about $10,000 a month in revenue, and an active business bank account. Have your last 3 months of business bank statements ready.

We Deliver Funding When You Need It. **Ready to see your options?** [Apply in about 5 minutes](https://deliverfunding.com/apply?utm_source=blog&utm_medium=article&utm_campaign=contractor-payroll-cash-gap) or call **(888) 974-0522** (Mon–Fri, 9am–6pm ET).

*A merchant cash advance is not a loan. Approval, amounts and terms vary based on business qualifications. This article is for general information and isn't financial, legal or tax advice.*

## Frequently asked questions

### Can a contractor get funding while waiting on a GC to pay?

Often yes. Revenue-based working capital looks mainly at your business bank deposits and monthly revenue, so a contractor with steady deposits can qualify even while receivables are outstanding. Typical minimums are about 6 months in business, about $10,000 a month in revenue, and an active business bank account.

### How fast can a contractor get working capital?

With Deliver Funding, decisions can come in as little as 24 hours and funding often follows within 24 to 48 hours of approval. Timing depends on your documents and the funding partner.

### Is a merchant cash advance a loan?

No. A merchant cash advance is the purchase of a portion of your future receivables at a discount. Remittances are tied to your revenue. Terms vary by business, and it usually costs more than a bank line of credit, so it fits short, specific needs best.

### Does applying affect my credit?

Applying for pre-approval with Deliver Funding does not require a hard credit pull, and all credit types are considered.

## Sources

- [Contractor Magazine, 'Subcontractors are Still Financing Their Own Jobs, 2026 Survey Finds', Sept. 4, 2026 (Siteline, 'The State of Subcontractor Billing in 2026')](https://www.contractormag.com/management/news/55403190/subcontractors-are-still-financing-their-own-jobs-2026-survey-finds)
- [Billd, 2026 National Subcontractor Market Report (sixth annual), June 23, 2026](https://billd.com/blog/billds-sixth-annual-national-subcontractor-market-report-reveals-the-playbook-behind-the-industrys-fastest-growing-subcontractors/)
- [Associated General Contractors of America, 'Construction Input Costs Rise 7.1 Percent as War and Tariffs Push Prices Higher', Aug. 13, 2026](https://news.agc.org/economics/construction-input-costs-rise-7-1-as-war-and-tariffs-push-prices-higher/)
- [U.S. Congress Joint Economic Committee (Minority), May 2026 (Intuit QuickBooks Small Business Index data)](https://www.jec.senate.gov/public/_cache/files/f159eea9-90fe-4924-8bcf-755042af6d94/jec-report-on-tariffs-small-businesses-final.pdf)

## Next step

Apply: https://deliverfunding.com/apply (agents: see https://deliverfunding.com/apply.md) · Call (888) 974-0522 · Email info@deliverfunding.com