Why Construction Subcontractors Should Advocate for Quick Pay Programs

Are slow-paying general contractors (GCs) making it hard for you to operate your subcontracting business effectively? It’s a common issue in the construction industry. Unfortunately, many GCs are completely unaware of your cash flow struggles or assume the only way to alleviate the strain is to pay you out of pocket or leverage external financing and absorb the costs. Thankfully, quick pay programs for subcontractors don’t come with these hangups and ensure you’re paid as soon as work concludes, so it’s easier to manage daily expenses and grow.

The catch, however, is that you may have to advocate for these programs. We’ll walk you through why it’s worth the effort and cover some talking points that can help get GCs on board with early payment programs below.

Cash Flow for Construction Subcontractors Remains a Persistent Problem

Cash flow is one of the most persistent pressure points for construction subcontractors, even when your work is steady and the backlog looks strong. The issues tie back to timing, gaps, and the way construction payment cycles actually function.

Typical Subcontractor Payment Terms Create Long Payment Cycles

While many industries operate on net 30 terms, meaning the business is paid within 30 days of invoicing, this isn’t the case in construction.

• Extended Payment Terms: Subcontractors wait an average of 56 days for payment, Billd reports. Surprisingly, GCs are completely unaware of this, with surveys showing most believe they’re following the 30-day standard.
• Progress Billing Lag: Even when you submit invoices on time, approvals, inspections, and draw schedules often push actual cash receipt weeks beyond the billing date.

Late Payments Are Common

Payment delays are widespread enough to be considered a systemic issue.

• High Frequency of Delays: More than two-thirds of subcontractors say they’re generally slow paid by GCs, per Billd.
• Administrative Friction: Missing paperwork, disputed line items, or minor compliance issues can stall payment even when the work itself is complete and accepted.

Retainage Ties Up Earned Revenue

Retainage continues to restrict access to the money you have already earned.

• Five to Ten Percent Held Back: Industry norms still place retainage between five and ten percent of each invoice, according to the Construction Financial Management Association (CFMA). That money may remain locked up until substantial completion or final closeout.
• Cumulative Impact: Over multiple active jobs, retained funds can represent tens or hundreds of thousands of dollars that cannot be used to operate or grow your business.

Costs Hit Before Revenue Does

Your expenses arrive on a very different timeline from your payments.

• Subcontractor Payroll Challenges: Payroll is typically weekly or biweekly, even though you may not see payment for months.
• Upfront Materials: Materials are often required before installation. Equipment rentals and fuel are ongoing. None of these vendors waits 56 days like you do either.
• Change Order Timing: Even approved change orders often get paid later in the project, which means you float the cost well before reimbursement.

Growth Magnifies the Strain

As touched on earlier, cash flow pressure tends to increase as your business scales.

• More Work Means More Float: Taking on additional projects increases the amount of capital tied up between work performed and payment received.
• Credit Limits Lag Reality: Traditional credit options often fail to expand at the same pace as your workload, leaving you to manage larger gaps with the same tools.

Construction Project Payment Terms Rule Out Most Common Business Financing Options

The very same construction payment terms and practices that create cash flow friction for you also create barriers to most traditional avenues for business financing, such as bank loans and lines of credit.

You Don’t Control the Payment Timelines

Construction revenue arrives on someone else’s schedule.

• Extended Approval Chains: Invoices move through inspections, sign-offs, and draw schedules before payment is released, often stretching timelines to sixty days or longer.
• Progress Billing Gaps: You may perform weeks of labor before a billing milestone is reached, which delays when invoicing can even begin.

Retainage Locks Up Earned Cash

From a lender’s perspective, retainage reduces usable collateral.

• Ongoing Withholding: Five to ten percent is commonly held back from each invoice until substantial completion or project closeout.
• Long Release Timelines: Retained funds may not be released for months after work is finished, especially if closeout documentation lags.

Liens Create Legal Complexity for Lenders

Even though liens strengthen your position legally, they make construction receivables harder for traditional lenders to underwrite.

• Project-Specific Receivables: Each invoice is tied to a specific job, contract, and payment chain rather than a generalized customer account.
• Jurisdictional Rules: Lien notice and enforcement requirements vary by state, which increases legal review and compliance risk for lenders.
• Priority Uncertainty: Lenders must evaluate how lien rights interact with other claims on the project, which adds time and complexity.

Contractual Risk is Passed Downstream

Financing models that rely on clean, enforceable receivables struggle in environments where payment depends on multiple external factors.

• Pay-When-Paid Clauses: Payment may be contractually tied to upstream funding events that are outside your control.
• Dispute Sensitivity: Minor documentation issues or line-item disagreements can stall payment without reflecting the quality of your work.

Growth Increases Exposure

Growth magnifies these barriers rather than solving them, which means your business can be busy, profitable, and still financially constrained.

• More Active Projects: Each additional job increases the amount of capital tied up between performance and payment.
• Lagging Credit Expansion: Traditional credit limits rarely scale at the same pace as workload and payroll obligations.

Subcontractor Quick Pay Solutions Are Accessible and Offer Many Benefits

Due to the limited number of viable subcontractor financing solutions, 75 percent of subs come out of pocket for materials and 86 percent for labor before receiving payment, per Billd surveys. One in three say they’ve had to pull from retirement or personal savings to cover cash deficits. Thankfully, construction quick pay solutions provide an alternate path that solves cash flow challenges.

Early Pay Construction Programs Are Built Around Earned Revenue

Quick pay solutions focus on invoices tied to completed, approved work.

• Job-Linked Invoicing: Funding is connected to specific project invoices rather than long-term financial forecasts or personal guarantees.
• Performance-Based Access: Your ability to access funds is tied to work performed and billed, which aligns closely with how subcontractors already operate.

Accessibility is Higher Than Many Subcontractors Expect

One common misconception is that faster payment subcontractor benefits are difficult to qualify for. In practice, accessibility is often broader than traditional financing.

• Reduced Reliance on Credit Scores: Approval focuses more on the quality of the invoice and project documentation than on personal credit history.
• Scales with Workload: As your invoicing volume increases, available funding typically grows alongside it, which helps support expansion.

Cash Flow Stability Improves Day-to-Day Operations

Faster access to earned funds changes how you manage your business.

• Payroll Confidence: You can meet weekly or biweekly payroll without juggling payment timing across projects.
• Material Purchasing Power: Early payment allows you to secure materials when needed rather than delaying work or negotiating extended supplier terms.
• Reduced Stress Cycles: Predictable inflows reduce the financial whiplash caused by long payment gaps.

Risk is Shifted Away from the Subcontractor

As touched on earlier, many traditional tools leave subcontractors carrying most of the timing risk. Quick pay solutions rebalance that exposure.

• Less Dependence on Draw Schedules: You are not forced to wait for upstream approvals to convert completed work into usable cash.
• No Long-Term Debt Accumulation: Accessing funds against invoices allows you to avoid stacking monthly repayment obligations that linger after a project ends.

The Mechanics of Quick Pay Programs for Subcontractors Are Straightforward

Now that we’ve covered the basics, let’s walk through how a typical construction quick pay program functions in practice.

Step One: Setup and Enrollment

The process begins with onboarding both general contractors and subcontractors into a quick pay system. These are typically offered by companies that provide invoice factoring for the construction industry such as Viva Capital, though sometimes other funding specialists offer them.

• Program Enrollment: The general contractor signs up with the quick pay provider and adds projects to an online portal.
• Subcontractor Selection: The contractor chooses which subcontractors can access the program based on their performance and project roles.
• Project Linking: Each subcontractor is tied to specific project milestones within the portal so the program knows which invoices will qualify for early payment.
• Subcontractor Acceptance: You choose whether or not to accept the invite to the system. If you do, the quick pay provider will gather some basic information from you about your business.

Step Two: Work Completion and Invoice Submission

Once the subcontractor completes the agreed-upon work or hits a pre-defined milestone, the next step kicks in.

• Invoice or Milestone Submission: You submit a payment application or invoice through the portal once work is approved by the GC.
• Automated Record Keeping: The system tracks lien waivers, partial releases, and other compliance documents needed for payment processing.

Step Three: Approval by the General Contractor

The GC reviews and approves your request. This step keeps the payment decision aligned with your contract and quality expectations, just with timing accelerated.

• Approval Trigger: The GC gets a notice and reviews the submitted invoice or application.
• Set Advance Amount: The GC determines how much of the invoiced amount should be advanced to you under the quick pay terms.
• Confirmation in Portal: Once approved, the advance moves into the funding stage.

Step Four: Funding to the Subcontractor

Instead of waiting weeks or months for payment through the owner or upstream payer, you receive the cash you earned quickly.

• Immediate Cash Access: Funds are issued to your account, often via wire transfer or check, typically within a few business days after approval. You receive the amount the GC approved, minus a small fee for the service.
• Optional Waiver Uploads: You may upload lien waivers or other proof of completion as part of the final funding step.

Step Five: Settlement After Owner Payment

Quick pay accelerates payment, but the billing relationship stays the same. This means the program improves timing without affecting your legal payment rights or the contractor’s obligations.

• Account Reconciliation: Once the project owner pays the general contractor, the quick pay provider settles the account based on the agreed terms.
• No Change in Contractual Obligations: The original pay terms of the contract are unchanged, and settlement reflects those terms.

Approaching General Contractors About Quick Pay Options is Easier Than You’d Think

Many subcontractors worry that asking for quick pay might make them sound confrontational, as if they’re asking for special treatment, or damage an otherwise good relationship. In reality, GCs are often open to discussion, particularly when you approach the conversation with care and respect.

Start by Closing the Awareness Gap

As touched on earlier, there is often a meaningful disconnect between how long subcontractors wait to get paid and how quickly general contractors believe payment flows. When you open the conversation, lead with context rather than requests.

• Payment Reality Education: Explain that extended payment timelines are common across projects, even when invoices are approved and work is complete.
• Systemic Issue Framing: Position this as an industry-wide timing issue rather than a complaint about a specific project or GC.
• Operational Impact Explanation: Share how delayed payments affect payroll timing, material ordering, and scheduling consistency.

Frame Quick Pay as a Process Improvement

General contractors respond better when quick pay is presented as an operational tool rather than a concession. Frame things in a way that reinforces that control stays with them, while improving timing for subcontractors.

• Workflow Alignment: Emphasize that quick pay programs work alongside existing contracts and approval processes rather than replacing them.
• No Change to Contract Terms: Make it clear that standard payment terms, retainage, and owner funding structures remain intact.
• Selective and Controlled Access: Highlight that GCs maintain approval authority and can decide which invoices or subcontractors participate.

Focus on Benefits That Matter to the Project

Discuss the benefits that support the overall project schedule and align directly with a GC’s priorities.

• Crew Stability: Faster payment helps subcontractors keep experienced crews on site instead of reallocating labor to manage cash gaps.
• Material Readiness: Earlier access to funds supports on-time material purchases, reducing delays tied to supplier terms.
• Schedule Reliability: When subcontractors are not juggling payment timing across projects, work progresses more predictably.

Keep the Conversation Low-Pressure and Collaborative

Ground the discussion in shared goals to avoid friction.

• Ask About Existing Options: Some GCs already have early pay programs in place, but do not actively promote them.
• Position it as Optional: Reinforce that participation is voluntary and project-specific.
• Invite Exploration: Suggest reviewing options together rather than asking for immediate adoption.

Connect with Viva Capital About Quick Pay Programs for Subcontractors

As a leading provider of construction quick pay solutions, Viva Capital offers competitive rates, an easy-to-use digital early pay system, and top-notch service. To learn more about Viva’s Quick Pay Program, get started as a GC, or refer a GC you think could benefit, get in touch.