A Dickinson, ND contractor can carry material costs until the next draw in four ways: supplier credit terms, cash on hand, a business line of credit drawn for the bill and paid down when the draw clears, or a working capital loan for a gap that comes back on every job. Which one fits depends on how long the gap lasts.
Supplier terms, cash, a business line of credit and a working capital loan can each carry materials until a draw clears. Invented examples put a price on a draw gap, a payroll wait and a mini excavator.
Government Contractor Loans: How a Stark County, ND Contractor Puts One to Work on Crew Payroll
A government contractor loan is not a product of its own. It is a working capital loan or a credit line taken by a company whose customer is a public owner, such as a city, a county or a school district. A public job pays through pay applications that are reviewed before a check goes out, and the crew is still paid on its usual payday while an application waits.
Illustration only, invented figures: a Stark County, ND contractor on a public job runs a biweekly crew payroll of $21,600, and its pay application waits 45 days. Depending on where the first payday falls inside those 45 days, the wait holds 3 or 4 paydays: $64,800 to $86,400 of wages before the check comes.
That range is the number to take into a funding conversation. A working capital loan sized near the top of it covers the worst case, while a business line of credit drawn one payday at a time avoids paying for money the job never needed.
General Contractor Loans When a Dickinson, ND Contractor Needs Mini Excavators
A mini excavator is a purchase, not a draw-gap cost, so it belongs in an equipment request rather than in the materials budget. Keeping them apart protects the job: a machine paid off over several years should not eat the cash set aside for lumber and concrete on the current one.
Illustration only, invented figures: a general contractor buys a mini excavator for $64,900, pays $7,900 up front and finances $57,000 for 48 months at 10.25% a year. Each payment is $1,452.52. Forty-eight of them make $69,720.96, so the machine costs $12,720.96 in interest on top of its price.
Machine purchases have their own page, equipment financing, with the details of financing a single unit.
Building Contractor Loans and Equipment Repairs: Notes for Dickinson, ND Contractors
A builder with three employees is in the larger group locally: of the 139 construction establishments with paid employees that County Business Patterns counted in Stark County, ND for 2023, 91 (65.5%) had fewer than five. Trade-level figures are on the construction funding page.
For a company that size, a thrown track on a skid steer or a split hydraulic line on a loader can stop a job. A repair has no new machine to secure it, so it is paid from working capital or a credit line, and the materials bill for the same week does not wait for the repair to be finished.
Illustration only, invented figures: a contractor draws $38,600 on a line to pay a lumber and concrete bill and pays it back 22 days later, when the draw clears. At an invented 11% a year, charged daily on the drawn balance, those 22 days cost $255.92 in interest.
Where Bonding-Ready Cash Fits in a Contractor's Plan for the Year
Public jobs and some private ones can require a surety bond, and a surety can look at a contractor's financial statements, its working capital among them, before deciding how much work to bond.
Cash kept for that purpose helps only if it is not spent on the next materials bill. A line kept for draw gaps can leave that cash in place; whether a loan or a line helps a particular bond application is a question for the contractor's surety agent and accountant. Timberwater does not arrange bonds.
Planning the year comes down to three numbers: the material bills due before each draw, the payroll inside each wait, and the cash to leave untouched for bonding. Local figures for builders are on the Dickinson, ND funding page.
By Timberwater Funding Group · Updated
