You fund mobilization costs before the first draw by listing every week-one cash outflow, matching it to reserves or documented credit, and refusing starts that exceed that bridge. Compare a mobilization bill or deposit, a business line of credit, invoice factoring, and a merchant cash advance, which is a purchase of future receipts, not a loan.
This is general information, not legal or financial advice.
What costs show up before you can bill?
Crew mobilization, equipment transport, bond and insurance deposits, trailer setup, initial materials, and the first one or two payrolls.
Public or bonded work can add compliance setup time before productive billing.
How do you build a mobilization cash sheet?
List each cost with a due date, then place the earliest realistic first-draw date beside it. Include a delay case.
If the sheet does not clear, change terms, phase, or decline.
What funding paths are honest comparisons?
Cash reserves, lines of credit, and eligible SBA 7(a) working capital differ from selling future receipts. See https://mcafax.com/notebook/construction-business-loans and https://www.sba.gov/funding-programs/loans/7a-loans (SOP 50 10 8.1).
Bond definitions: surety bonds. Caller screening: stop MCA broker calls.
Here is an honest comparison of the options shops use before the first draw.
Negotiating terms or mobilization billing. Ask the owner to put a mobilization line in the schedule of values, release a deposit, or phase the start so week-one cash is not all on you. This does not add a finance factor, but it depends on what the contract already allows. Get the dates and amounts in writing before trucks roll.
Invoice factoring. The Federal Reserve describes invoice factoring as the sale of unpaid invoices to a provider in exchange for a factor rate or fee. The provider typically collects from the account debtor and keeps a fee; the remaining balance comes back to you. Factoring offers often do not quote an interest rate or APR, so compare the total dollars withheld against the cash you actually receive and how long the invoice stays open. Factoring helps only once there is an invoice to sell; it does not fund costs that leave before you can bill. (Federal Reserve, Consumer and Community Context, March 2025)
Business line of credit. You draw, repay, and redraw within a limit. Interest generally accrues on the amount drawn, not on a sale of receipts. For SBA 7(a) Working Capital Pilot lines, SBA says interest rates cannot exceed the base rate plus 6.5 percent on facilities of $50,000 or less, plus 6.0 percent from $50,001 to $250,000, plus 4.5 percent from $250,001 to $350,000, and plus 3.0 percent above $350,000. Those are caps, not quotes, and they apply to that SBA program. Other lines set their own rates and fees. Confirm the current program page: SBA 7(a) loans (SOP 50 10 8.1).
Merchant cash advance (MCA). An MCA is not a loan. FTC staff describe it as a purchase of a fixed amount of future receivables: you repay the advance plus a factor, often between 20 percent and 50 percent of the amount advanced, usually through daily payments that are supposed to rise or fall with sales, typically over a few months to one year. Panelists noted very high costs, including estimated APRs in the triple digits in some cases, and the risk of taking additional advances against the same receipts (called stacking). (FTC, Strictly Business Forum Staff Perspective, February 2020)
Ask every offer for the total dollars you receive, the total dollars you repay, and the payment schedule. Keep equipment loans and leases separate from any offer that buys future receipts.
When is a start date actually a trap?
When notice to proceed is verbal, bonding money is due immediately, and the first pay estimate calendar is undefined. Get dates in writing first.
Worked example
All names and numbers are made up.
Harbor Utility won a municipal package. Week-one outlay: $18,000 bond-related deposits and insurance, $12,000 equipment haul, $15,000 initial materials, and two payrolls at $9,000 each, totaling $63,000 before the first pay estimate. Available cash was $40,000. They delayed full mobilization, negotiated a narrower first phase, and opened a working-capital discussion instead of a receipt-purchase pitch. Menu: where to get business funding.
What must be true before trucks roll?
- Written notice to proceed
- Mobilization cash sheet with dates
- Bond and insurance dollars identified
- First pay estimate calendar estimated with a delay case
- Funding gap closed or job re-scoped
Before you act, align the cash dates, the written quote or program page, and the next payroll. Keep equipment loans and leases separate from any offer that buys future receipts.
Use https://mcafax.com/notebook/construction-business-loans for contractor context and https://mcafax.com/notebook/where-to-get-business-funding when you compare funding paths.
