This article from Orchardshore Advances in Cleburne, Texas explains how trade contractors carry materials and mobilization costs before a job pays, using supplier accounts, deposits, joint checks and lines of credit, with Johnson County, TX trade counts and an invented roofing job.
Mobilization Costs: Materials, Permits and Crew Hours Before the First Draw
Before the first invoice, a trade contractor has already paid for a lot: wire, panels and conduit; pipe, fixtures and water heaters; shingles, underlayment and flashing; permit fees; dumpster rental; fuel; and a week or two of crew wages. On a residential job paid at completion, all of that waits until the homeowner or the insurer pays. On a commercial job, it waits for the first draw, which follows the general contractor's billing cycle.
County Business Patterns counted 369 specialty trade contractors with paid employees in Johnson County, TX in 2023: 88 plumbing, heating and air-conditioning contractors, 70 electrical contractors and 47 roofing contractors among them. Nonemployer Statistics counted 2,411 specialty trade businesses without paid employees in 2024, a separate program.
Supplier Accounts, Joint Checks and Material Deposits
- Supplier accounts: net-30 terms from the supply house carry materials for a month at no added cost if paid on time, the first source to use.
- Customer deposits: residential contracts can call for a deposit toward materials; check what the contract and any applicable rules allow.
- Joint checks: on some commercial jobs, the general contractor pays the supplier and the subcontractor jointly, which can help a sub get credit for a large order.
- A line of credit: covers what the first three do not, drawn per job and repaid when the job pays.
A Construction Line of Credit for Johnson County, TX Trades
A business line of credit fits trade work because each job opens and closes a gap. The contractor draws for materials and payroll at the start, and the balance falls when the job pays. Partners read the contractor's job history: how many jobs a year, average job size, and how many days customers and general contractors take to pay. A line that rises and falls with jobs looks healthy; one that stays near its limit suggests the business needs longer-term money.
Larger trade firms may also need working capital for a single large contract, sized to that contract's payment schedule.
How a Letter of Credit Works in Construction, and Why It Is Not Cash
Some commercial owners and suppliers ask for a letter of credit: a bank's promise to pay them if the contractor does not perform or pay. It gives the other party assurance, but it puts no money in the contractor's account, and the bank may set aside part of the contractor's credit capacity to back it. Contractors who need materials money need a line or a loan; a letter of credit answers a different request.
Can a Trade Contractor Get a Loan for Materials on a New Build?
Yes, as working capital or a line of credit tied to the contract. Johnson County, TX authorized 2,356 new housing units in 2025, after 2,527 in 2023 and 2,183 in 2024 (Census Building Permits Survey), and every one of those houses needed wiring, plumbing and a roof. Subcontractors on new builds are paid by the builder, so the partner reads the builder relationship and the payment history as much as the subcontractor's own numbers. Financing for contractors covers draws and retainage in more detail.
Trucks, trailers and tools are a separate request. Equipment financing covers a bucket truck, a jetter or a dump trailer against the item itself.
A Roofing Job Financed With Invented Figures
Illustration only, invented figures: a Cleburne roofer signs a $46,000 commercial reroof. Materials cost $17,500 and the crew's wages for the job come to $9,800, so $27,300 goes out before payment (our arithmetic). In the invented job, the supply house gives 30 days on $17,500; the building owner pays 45 days after completion, which is five weeks after the start.
In the invented case the roofer draws $17,500 on a line to pay the supplier on time at day 30, covers wages from cash, and repays the draw when the owner's $46,000 arrives. In this invented job, interest runs only on the drawn $17,500 for the weeks it is out. Without the line, the roofer would either miss the supplier's terms or hold off on the next job until this one paid.
A Short Checklist Before Asking for Materials Money
- List open jobs with contract amounts, expected completion and payment dates.
- Note supplier terms and current balances.
- Print the last several months of bank statements and the most recently filed return.
- Add up retainage held and when it should be released.
- List current equipment loans, lines and any advances with their payments.
By Orchardshore Advances · Updated
