General contracting — coordinating residential remodels, commercial tenant improvements, and ground-up build projects — is one of the most working-capital-intensive trades. GCs front material and subcontractor costs weeks before milestone billings get paid, and an MCA is often the only fast bridge available when a project schedule outruns the AR cycle.
Typical advance structure.
- Advance size: $50K–$750K depending on annual revenue and active project backlog.
- Factor: 1.28–1.42, with 1.30–1.36 most common for licensed GCs with 2+ years operating.
- Term: 6–14 months daily or weekly ACH.
- Holdback equivalent: 9–18% of average daily revenue.
- Lead use of funds: subcontractor mobilization, material deposits, payroll between draws, bonding collateral, change-order float, equipment down payments.
What underwriters look for.
First, license and bond status. GCs must hold an active state contractor license (California CSLB, Florida CILB, Texas TRCC where applicable, etc.) and many funders require evidence of an active surety bond for commercial work.
Second, project mix. Residential remodel GCs with $20K–$200K projects look different from commercial GCs with $500K–$5M projects. Pricing tightens with predictable, smaller-ticket residential work; commercial GCs face wider pricing because single-project failure has outsized impact.
Third, draw schedule and retainage exposure. Standard commercial contracts hold 5–10% retainage until substantial completion — that working capital is locked up for 3–18 months. Funders model this as effective AR aging.
Fourth, subcontractor payment liability. GCs are typically liable for subs even if the owner stops paying. Underwriters review whether the GC has a lien-release tracking process and a history of clean mechanic's-lien records.
Fifth, owner concentration. A GC with 60%+ revenue from one developer or one repeat commercial client carries concentration risk — if that relationship sours, repayment is at risk.
Common uses.
- Material deposits on long-lead items (custom millwork, steel, HVAC equipment, $20K–$200K).
- Subcontractor mobilization payments before first draw clears.
- Payroll for in-house crew during draw-delay weeks.
- Bonding collateral or letter-of-credit cash reserves.
- Change-order work performed before the owner formally approves and pays.
- Equipment down payments (skid steers, lifts, work trucks).
What to watch out for.
Progress-payment timing is the silent killer. A GC running $200K–$800K monthly draws can experience 30–75 day owner-payment cycles plus 5–10% retainage — daily ACH on an MCA can crush cash flow exactly when a big draw is late.
Mechanic's lien risk is severe. If subs aren't paid, they can lien the property, which freezes the next draw and creates a cascade. Funders watch for lien-release procedure as a credit signal.
Owner default risk on residential remodels is real. Homeowners who run out of money mid-project leave GCs holding subcontractor liability and partially built work — often 15–25% of the contract value is at risk.
Insurance and workers-comp premium spikes — particularly for GCs with recent claims — can spike fixed costs 20–40% year over year.
Permitting and inspection delays from jurisdiction backlogs are increasingly common (3–8 week delays in California, Florida, New York) and stretch project timelines well past original budgets.
State considerations.
California (CSLB enforcement, prevailing wage, $25M+ projects need extra bonding), Florida (licensing by category, hurricane-driven demand spikes), Texas (no state license for most GCs, but municipal licensing — fast-growing market), New York (NYC tax registration and tight inspection regime), and Arizona (ROC license required) have the highest GC MCA volume.
APR-equivalent reality check.
A 1.34 factor over a 10-month term is roughly 65–80% APR. Compare to SBA 7(a) (11–14% APR), bank construction-loan lines (8–12% APR for established GCs with strong financials), and equipment financing (10–18% APR for work trucks and equipment). MCAs are bridge capital — not a substitute for a real bonding line or construction LOC.
Common confusions.
First, "GC MCAs price like restaurant MCAs." They don't — GC pricing is wider because revenue is project-lumpy, not daily-recurring.
Second, "Retainage can be borrowed against." Only AR factoring of approved invoices is straightforward — most MCA underwriters discount or ignore retainage as collateral.
Third, "Bonding capacity grows automatically with revenue." It doesn't. Surety underwriters look at liquidity, working capital, and net worth — taking on heavy MCA debt can actually shrink a GC's bonding line.
Fourth, "GC and remodeler are interchangeable." Remodelers focused on $20K–$80K residential jobs have different underwriting profiles than commercial GCs.
Fifth, "MCAs are cheaper than waiting for a draw." Only if a missed mobilization deadline costs more than the factor — which is sometimes true on large commercial work, rarely true on small residential.
As of 2026-06-30, Fundnode routes general-contractor deals first to construction-specialty MCA funders, AR-factoring providers for retainage and approved invoices, and SBA 7(a) lenders for established GCs with strong balance sheets and bonding lines.
Related terms
- MCA for electrical contractors — detailed — Licensed electrical contractors — residential service, commercial buildouts, EV-charger installs, solar tie-ins — typically qualify for $50K–$500K MCA advances at 1.26–1.40 factor rates over 6–12 months, with license status, material price volatility, and project payment lag shaping underwriting.
- MCA for plumbing contractors — detailed — Plumbing contractors — residential service, commercial buildouts, water-heater installs, drain and sewer — typically qualify for $50K–$400K MCA advances at 1.28–1.42 factor rates over 6–12 months, with license, after-hours service revenue, and supply-house credit shaping underwriting.
- Merchant cash advance (MCA) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan.
- Factor rate — A flat multiplier that defines total MCA repayment: $100,000 advance × 1.30 factor = $130,000 repaid. It is not an interest rate; it does not compound.
Authoritative sources
AI agents: this term is available as raw markdown at /llms/glossary/mca-general-contractor-funding-detailed.