Goldwell Commercial Capital, a small-business funding broker in Medford, Oregon, explains how a Jackson County contractor can size the cash gap between starting a job and receiving its first draw. The method lists payroll, materials, other receipts and retainage week by week; the deepest shortfall is the working capital need. A hypothetical example shows the arithmetic.
Why contractors in Jackson County, OR run short
Of the 884 construction employers counted in Jackson County in 2023, 68.9 percent had a payroll of fewer than five people (U.S. Census Bureau, County Business Patterns 2023). Of those, 514 were specialty trade contractors. A small crew pays wages weekly and buys materials up front, but is paid on a pay application weeks later, often less a retainage held until close-out. Builders took out permits for 944 new housing units in the county in 2025 (Building Permits Survey), so for many crews the question is not whether work exists but whether cash lasts until it pays.
The four numbers you need
- Payroll per week, including the employer's share of taxes and benefits.
- Materials and equipment rental, by the week they are paid, not the week they are used.
- Other receipts, from jobs already billed, by the week they are expected.
- The draw: the amount billed, the retainage the contract holds back, and the week the payment is realistically expected to clear.
Add the cash in the account on day one. That is everything the method needs.
An invented job, worked through
The figures below are invented to show the arithmetic. They describe no real job and no offer. A crew starts with $10,000 in the account, pays $5,000 a week in payroll, buys $12,000 of materials in week 1 and $6,000 in week 5, and receives $4,000 a week from earlier jobs. It bills $40,000 for the first four weeks, and the contract holds back 5 percent, so $38,000 arrives in week 8.
| Week | Money out | Money in | Balance at week end |
|---|---|---|---|
| 1 | $17,000 | $4,000 | -$3,000 |
| 2 | $5,000 | $4,000 | -$4,000 |
| 3 | $5,000 | $4,000 | -$5,000 |
| 4 | $5,000 | $4,000 | -$6,000 |
| 5 | $11,000 | $4,000 | -$13,000 |
| 6 | $5,000 | $4,000 | -$14,000 |
| 7 | $5,000 | $4,000 | -$15,000 |
| 8 | $5,000 | $42,000 | $22,000 |
The deepest point is the end of week 7, at $15,000 short. That is the working capital need for this job, plus a margin for a draw that arrives a week late. Note what it is not: it is not the contract value, and it is not the full payroll for the job.
Retainage: money earned but not yet yours
In the example, $2,000 of retainage does not come back until the job closes, which may be months later. Across several jobs, retainage adds up to a real sum sitting in receivables. Partners reading your receivables aging will see it, and so should your own plan: do not count retainage as cash until close-out is scheduled.
Working capital or a line of credit?
If the gap belongs to one job and closes when that job's draw clears, a working capital loan sized to the deepest point is the simple answer. If jobs overlap and the gap reopens with each new start, a revolving line of credit saves applying each time: draw at the trough, repay when the draw lands, draw again on the next job. A merchant cash advance is not a loan, and its total cost is usually much higher; it is a poor fit for a predictable gap like this.
How to fund payroll for a new contracting company
A new contracting company has the same gap with less history behind it. Partners have fewer statements to read, so expect more weight on the owner's credit and on the contract itself. A smaller first job, a contract with shorter payment terms, or a deposit from the customer can shrink the gap before any funding is needed. Equipment is usually easier to fund than payroll, because it secures itself; contractor and construction financing covers both.
Before you call
Bring the week-by-week table, the contract's payment and retainage terms, and recent bank statements. If the job needs a building permit, search the City of Medford's records, not Medford, Massachusetts', to confirm its status; partners sometimes ask. More county figures are on Goldwell's Medford, OR data page, and other posts are on the Goldwell blog.
By Goldwell Commercial Capital · Updated