The draw schedule is where good contractors get squeezed. You have completed the work, submitted the pay application, and now you wait — while payroll and the next phase of materials come due. Bad credit makes banks useless for this timing problem. Funded Contractor Capital funds contractors between draws on FICO 500-650, based on the job, not the score.
What the draw gap actually is
On most commercial and larger residential jobs you get paid in progress draws tied to completion percentages. You finish a phase, submit a pay app (often AIA G702/G703), the GC or owner reviews it, and 30-60 days later the money lands. That lag between spending on the phase and collecting for it is the draw gap — and it is the single most common reason a busy, profitable contractor runs out of cash.
Why bad credit blocks the obvious fixes
A bank line of credit is the textbook solution to a draw gap. But bank lines require strong personal and business credit, tax returns, and weeks of underwriting. If your FICO sits at 560 from a rough season or old debt, the bank line is off the table — exactly when the timing problem is most acute. That is the trap: the contractors who most need draw-gap capital are the ones banks screen out.
How draw-gap funding works at FICO 500-650
Instead of scoring your credit, Funded Contractor Capital looks at the flow of a working contractor: deposits hitting the account when draws release, the size of your active backlog, and how you manage cash between payments. An advance is sized to that flow. You draw the capital now, deploy it into payroll and materials, and repay as the pending draw and future draws come in.
- Advance now to cover this phase’s payroll and materials
- Repayment aligned to your incoming draw cycle
- 500+ FICO accepted — the pending draw is the story, not the score
A worked example
Say you are a mechanical sub on a $600K contract, 40% complete, with a $90K draw submitted and 45 days out. Payroll for the next phase is $28K, and materials are $22K COD. A $60K advance covers both, keeps the crew on site, and repays as the $90K draw plus the following one release. Without it, you either slow the job (and risk the schedule) or float it on personal cards (and sink your credit further).
Keeping draw-gap funding healthy
Use draw-gap capital for the gap, not as permanent operating money. Match the advance to a specific pending draw so repayment has a clear source. Keep NSF events near zero and your average daily balance above $2,000 in the 30 days before applying — that is what lifts your approved amount and lowers the cost.
Retainage: the second gap most contractors forget
The draw gap is not the only hold on your money. Most construction contracts also withhold retainage — typically 5-10% of every draw — until the entire job is complete and closed out. On a $600K contract that is $30K-$60K sitting in someone else’s account for months after you have done the work. Bad credit makes that trapped cash impossible to borrow against at a bank.
Revenue-based funding treats retainage the way it treats draws: as future deposits you can advance against today. If your closeout is 60 days out and you need working capital now for the next job, an advance sized to your overall flow — draws plus pending retainage — keeps you moving instead of waiting on a punch list. Stacking the draw gap and the retainage gap is exactly where undercapitalized contractors stall, and it is exactly what this funding is built to bridge.
Frequently asked questions
Can I get funding between draws with bad credit?
Yes. Funded Contractor Capital funds contractors at FICO 500+ to bridge the draw gap. Approval is based on your active project cash flow and bank deposits, not your credit score, so a pending draw and steady flow carry the file.
Do you need to see my pay applications or contracts?
A list of active contracts and your three months of bank statements is enough to size an advance. We do not require tax returns or a full document package.
How is this different from invoice factoring?
Factoring buys a specific invoice and collects from your customer. Draw-gap funding is a revenue-based advance against your overall project flow — you keep the customer relationship and control collections yourself.
How fast can I get bridged before my next draw?
Decisions in about 4 hours, funding within 4-24 hours of approval — fast enough to cover this Friday's payroll while a draw is still pending.