Construction receivables
The invoice is a percentage of a job, and part of it was never going to be paid this year.
For the factor funding contractors and subcontractors. Most factors who say they do not fund construction are really saying they once funded a progress billing without understanding retainage, a pay when paid clause and a lien deadline at the same time.
All three are knowable. They are dates and documents, and dates and documents are what a platform is for.
Why this vertical bites
Four things that are ordinary in construction and catastrophic anywhere else.
The paperwork
A pay application is not an invoice. It is a claim about a percentage.
The document set in this industry does the work that a purchase order and a proof of delivery do elsewhere. A schedule of values breaks the contract into line items. A pay application claims a percentage complete against each of those lines for the period, carries the retained amount separately, and states the balance to finish. A certification signed by the architect or the project manager is what turns the claim into something a general contractor is expected to pay.
Change orders are the live risk in the file. Work performed under a verbal instruction and billed before the change order is executed is the most common disputed amount in construction receivables. It is held as its own state, unexecuted rather than merely unpaid, because those two things fail differently and only one of them is a collections problem.
Conditional and unconditional waivers travel with the money. A waiver exchanged for a payment that has not cleared is a document your client has already given away. The waivers issued, their conditions and the payments they correspond to are recorded together, because the sequence is what matters and the sequence is exactly what nobody can reconstruct six months later.
Lien rights are jurisdictional and unforgiving. Deadlines for preliminary notices and lien filings differ by state and by the role your client played on the job, and FactorFox does not interpret them. Your counsel decides what applies. The platform records the dates they give you, treats them as conditions that expire, and makes sure a person with the authority to act hears about them while acting is still possible.
Where verification actually lands
On a commercial book you verify that the goods were delivered. On a construction book you are verifying that a percentage of completion was accepted by somebody with the authority to accept it.
The certified pay application, signed by the architect or project manager, is that evidence. Verification runs capture it at the moment they run and are never re fetched, so the certification signs over the position exactly as it stood.
Funding a job
What changes in the cycle when the receivable belongs to a project.
The purchase mechanics are the same as any factoring book. The eligibility questions are not.
- Job setup
The job is the unit, not the client
Owner, general contractor, contract value, retainage terms, payment clause, bond status and the notice deadlines that apply are recorded per job. A client with four jobs has four different risk profiles, and one of them is usually the reason the client is calling you.
- Billing
The pay application arrives with its schedule of values
Extracted under a strict schema and revalidated in ordinary code, with the retained portion separated from the currently payable amount at intake rather than during a dispute. Line items claimed at a percentage above the prior period without a corresponding change order are flagged before purchase.
- Eligibility
Retainage, unexecuted change orders and stale notices come out
Each exclusion carries its reason, so the client is shown why their availability is what it is. Retainage in particular is not a haircut applied to a total, it is a distinct balance with a release condition tied to job closeout.
- Monitoring
Job progress and payment behaviour are watched together
A job where billing has continued but payment has not is a different signal from a client whose whole book is slowing. Payment velocity is measured per general contractor across every client billing them, which is where a struggling contractor first becomes visible.
- Closeout
Retainage becomes collectable, or it becomes a conversation
Release conditions, final waivers and the punch list are tracked to the point where the retained balance is payable. Retainage that ages past closeout without release is an exception with an owner rather than a balance that quietly sits in aging for another quarter.
Related
Bring a job that closed out badly.
We will set it up against a demonstration book with its retainage terms, payment clause and notice dates, and show you what the file would have looked like six weeks earlier.