Construction MCA for progress payment bridging — the detailed 2026 playbook.

The 90-second answer

Construction subs live with a structural cash gap: you spend on labor and materials in weeks 1–4 of a project, you bill the GC at month-end, the GC pays 30–60 days after that. On a $120K job with $42K of week-1 material spend, you're floating $42K for roughly 50–70 days. Multiply that across 3–5 active jobs and the gap is six figures.

An MCA can bridge that gap — but it isn't free, and it isn't always the right product. The MCA is a lump-sum advance repaid via daily ACH, so you're trading a one-time cash injection for a daily revenue drag. It works when your other active jobs are kicking off steady deposits that can absorb the daily ACH while you wait for the big draw. It fails when you've got one big job, nothing else moving, and the daily ACH eats into your materials budget for week 2.

This article walks through the right sizing, the lien-waiver and UCC interactions, the four traps that put construction subs out of business, and the alternatives that often fit better than MCA.

Worked example: bridging a $120K commercial sub draw

A drywall sub in Houston signs a $120K contract for a midsize commercial buildout. Draw schedule:

• Week 1: mobilization, $8K in materials, $14K in labor — $22K out of pocket.
• Week 2: $20K more materials, $16K labor — $36K out of pocket cumulative: $58K.
• Week 3-4: $12K labor, $4K materials — $74K out of pocket.
• Day 30: first progress invoice submitted to GC for $80K (60% draw).
• Day 52–58: GC pays the $80K draw via ACH.

Net cash position on day 30: down $74K. The sub needs that money back to start the next job, pay this week's labor, and order materials for project completion.

Option A: MCA bridge

$50K MCA at a 1.36 factor, 9-month term. Daily ACH on 189 business days: $50,000 × 1.36 / 189 = ~$360/day. Funded in 3 business days.

Net cost: $18,000 fee over 9 months = roughly $2,000/monthin daily ACH drag. If the sub has 2–3 other active jobs generating $30K+ in weekly deposits, that $360/day is absorbable. If it's their only active job, $360/day on day 1 when they're already $22K underwater is a recipe for default.

Option B: SBA Express line of credit

$50K SBA Express LOC at prime + 4.5% (currently ~12% APR). Cost on a 70-day bridge: $50,000 × 0.12 × (70/365) = ~$1,150. Funded in 30–45 days.

Materially cheaper per use. But the SBA Express timeline (30–45 days to approve a new line) means you can't use it on the first draw — only on the second and beyond. The right play: take the MCA for draw #1, set up the SBA Express in parallel, transition to the LOC for subsequent draws.

Option C: invoice factoring

Sell the $80K invoice to a construction factor at 3% net 30: $80,000 × 0.03 = $2,400 fee. Funded within 5 business days of GC approval of the invoice.

Construction factoring is more expensive than trucking factoring (because GC payment timelines are less predictable and lien-waiver paperwork adds risk), and not all GCs accept factored invoices. Verify in advance.

The honest comparison

• MCA $50K @ 1.36: $18,000 cost, 3-day funding, no GC consent needed.
• SBA Express LOC: $1,150 cost on a 70-day draw, but 30-45 days to set up, can't fund draw #1.
• Construction factoring: $2,400 per invoice, 5-day funding, requires GC consent.

MCA is the most expensive and fastest. SBA Express LOC is the cheapest and slowest. Factoring is the middle. Most subs end up using the MCA on the first draw of a new GC relationship and migrating to LOC + factoring on subsequent draws.

The four traps that put construction subs out of business

Trap 1: oversizing the MCA

The broker wants the bigger commission, so they push for a $100K advance when $50K is what you actually need. The $100K MCA at 1.36 over 9 months is $720/day in daily ACH. If your active-job mix only generates $25K/week in deposits, that $720/day eats 20% of your weekly cash before you spend a dollar on materials.

Fix: size the MCA to 1.5–2x your week-1 spend on the largest active job, not to "max approval." Tell the broker upfront: "I want $50K, period. Don't waste my time with $100K offers."

Trap 2: stacking a second MCA mid-project

Project hits a snag — change order delays GC payment by 3 weeks, materials cost spiked, labor overtime. Sub takes a second MCA to plug the gap. Now you have $50K + $30K in MCAs, combined daily ACH of $560/day, on a business that maybe generates $4K/day in deposits. This is how construction subs default in week 4.

Fix: if you're considering a second MCA, stop and call the first funder about reconciliation. Most have a clause that lets you drop the daily ACH by 25–50% if you can show revenue dropped proportionally. Use the clause. Don't stack.

Trap 3: not coordinating the UCC filing with bonded work

Sub takes an MCA, the funder files a UCC-1. Two months later sub bids on a $500K bonded job and the surety pulls a UCC search. The recent MCA filing flags as financial distress, surety declines, sub loses the bid. The MCA fee was $15K — the lost bid was a $90K margin opportunity.

Fix: if you're going to bid bonded work in the next 6 months, exhaust SBA Express, equipment financing, and asset-based lending before MCA. If you must take an MCA, time the bidding for after the MCA UCC is satisfied (or pay for early termination).

Trap 4: misreading the daily ACH as "monthly" cost

"It's only $360 a day, no big deal." Multiplied by 22 business days, that's $7,920/month. Multiplied by 9 months, that's $71,280 in cumulative ACH outflow against a $50K advance. A surprising number of subs sign without doing the multiplication.

Fix: build a 13-week cash flow projection that includes every daily ACH against your worst-week revenue scenario. If the cash position goes negative in any week of the projection, the MCA is too big or the underlying business doesn't support it.

The lien-waiver and UCC-1 interactions

Three things every construction sub should understand about how an MCA interacts with construction-specific contract paperwork:

• The MCA UCC-1 is a blanket business filing. It covers all business assets — including accounts receivable from GCs. It does NOT create a mechanic's lien on the specific project, and it does NOT show up in the title work for the project property.
• Your lien waivers to the GC operate independently. When you sign a partial or final lien waiver for a progress payment, you're waiving your right to file a mechanic's lien against the project. The MCA UCC doesn't change this — but the MCA funder also can't reach the GC's payment until it lands in your bank account.
• Some larger GCs do UCC searches on subs before progress payments.Turner, Skanska, AECOM, and a few other top-50 GCs run UCC checks on subs above a certain contract value (usually $500K+). A recent MCA UCC filing won't kill the payment, but it may slow it down and trigger questions from the GC's financial team.

When MCA is the right call for construction

• You have 2+ active jobs generating predictable weekly deposits
• You need cash in 3–5 business days for a specific draw bridge
• You've modeled the daily ACH against worst-week revenue and it still works
• You're not bidding bonded work in the next 6 months
• You have an SBA Express or LOC application in motion for the next draw cycle

When MCA is the wrong call for construction

• You have one active job and nothing else generating revenue
• You're bidding bonded work and need clean financial reporting for the surety
• You're already carrying an open MCA — stacking kills more construction subs than anything else
• The material-cost volatility on the active job means you can't forecast week 4
• The GC has a history of late payments beyond 60 days — your MCA repayment window is shorter than your collections cycle

What to ask before signing

• "What's the reconciliation policy if a GC payment delays 30+ days?"Construction-specific funders (Mulligan Funding, Reliant Funding, World Business Lenders) often have generous reconciliation. Generic MCA funders may not.
• "Will this UCC filing show up on a surety credit check?" Yes, always. But knowing helps you time it against your bid pipeline.
• "What happens if I want to take an SBA loan in 6 months — do I have to pay off the MCA first?" Yes — and ask about the prepayment discount now, in writing.
• "Is the broker getting a back-end commission tied to the size of my advance?"If yes, they're incentivized to oversize you. Get an independent quote.