Banking a General Contracting Business Around Draw Schedules

Say a $2 million project carries 10 percent retainage: $200,000 of your earned revenue sits with the owner until close-out, sometimes a year or more after the work finished. Treating that retained amount as part of your available cash, rather than as a receivable you're owed later, is a common way GCs overstate how much working capital they actually have mid-project, and it's a mistake that tends to surface right when the company is bidding its most ambitious project yet and needs an accurate picture the most.

Because subcontractors won't sign a lien waiver until they're paid, and you often can't bill the next draw until you have signed waivers in hand, sub payables and project draws are tightly linked in timing but easy to mix up in a single account. Relay's ability to open a dedicated account per active project, up to 20 accounts under one login, gives each job a clean view of draws in versus subs paid out, which matters most on a company running several projects at different completion stages at once, where a well-funded early-stage job can otherwise mask a late-stage job that's short on retainage-eligible cash.

Most GCs carry a line of credit to bridge the gap between paying subs and collecting the next draw, priced off the bank prime rate, which stood at 6.75 percent as of mid-2026¹. A construction line priced at prime plus a couple of points means that gap financing has a real, calculable cost that should factor into how aggressively you negotiate draw schedules and retainage terms on new contracts, rather than treating the line as free money that happens to be available whenever a draw is late.

A smaller GC running one project at a time, with a bank line already in place and a bookkeeper who reconciles draws against sub payables manually, can operate on a single Mercury account without a full per-project structure. The complexity should scale with how many projects you're running concurrently, not with company size alone, since even a large, well-established GC running one project at a time has a simpler tracking problem than a smaller shop juggling three.

The most frequent mistake is billing the owner for a draw before subcontractor lien waivers are actually signed, which can delay payment and strand cash you already counted as collected. A close second is spending a draw against the next project's mobilization costs before the current project's retainage is released, which quietly transfers risk from one job to another without anyone deciding to take it on. A third, less obvious pitfall is underestimating how long retainage actually takes to release once the punch list is done, since owners can be slow to formally sign off even after the work itself is finished.

Watch for these common project cash mistakes:

• Billing the owner for a draw before subcontractor lien waivers are signed, which can delay payment and strand cash you already counted as collected.
• Spending one project's draw on the next project's mobilization costs before the current project's obligations are covered.
• Treating retained amounts as available cash instead of a receivable that is only owed to you at close-out.
• Letting a change order go unapproved, which can hold up the draw covering work your crew has already performed.

Before bidding a large project with meaningful retainage, estimate how long that retainage will realistically be tied up based on your experience with similar owners, and confirm your credit line has enough headroom to bridge that gap on top of whatever else is drawn against it. A GC that only checks its line's capacity against current draws, without accounting for the retainage still outstanding on recently finished projects, can find itself surprised by how little room is actually left.

A change order that hasn't been formally approved by the owner can hold up the draw covering the work it describes, even after your crew has already performed it, because the owner's lender or the owner themselves may want the change order paperwork finalized before releasing funds for that scope. Track pending change orders separately from approved contract value, with their own expected approval timeline, so a stack of unapproved change orders doesn't quietly become the reason a draw that should have cleared on schedule is running weeks behind instead.