How Subcontractor Early Payment Programs Build Relationships

From the onset of work until a final check is cut, subcontractors wait an average of 74 days, CURT reports. While this alone calls for better working capital and payment solutions, rising costs have further aggravated the problem, creating more stress and strain on the jobsite. However, early payment programs for subcontractors can eliminate these payment gaps and allow general contractors (GCs) to build better relationships with their teams. In this guide, we’ll explore how early payment plans work and how to get started with one if the model is a good fit for your business.

How Early Payment Programs for Subcontractors Work

Nearly three-quarters of subcontractors say they’d offer a discount if it guaranteed payment within 30 days, per Rabbet surveys. GCs understand just how important this is, which is why an equal number will tap into short-term financing solutions like credit cards and lines of credit when payments are delayed.

Early payment programs give subcontractors access to quicker payouts without forcing you to change how your business manages project cash flow. Instead of waiting for the developer or project owner to release funds, or covering that gap yourself, you authorize payment after work is completed, and a third-party funder steps in to pay the subcontractor directly.

Because Viva Capital offers a Construction Quick Pay Program, we’ll outline what a typical process looks like and also cover what makes Viva’s program unique below.

You and the Subcontractor Enroll in the Program

The process starts with onboarding. Both parties provide basic documentation to the payment provider, including job details and bank information, so everything is ready when it’s time to release funds.

Viva’s process differs somewhat here because everything is handled through a secure portal, and you, as the GC, invite preferred subcontractors to Quick Pay. From there, the subcontractors can choose whether to participate in the program or not.

Within the portal, you can also set up jobs, add specific subcontractors, and add milestones that determine when a subcontractor qualifies for the advance.

Work Gets Completed and Approved

Once the subcontractor finishes their scope of work and requests payment, you approve it. That triggers the early payment process. It’s like submitting a pay app or signing off on an invoice.

Subcontractors Receive Funds Within Days

Instead of waiting weeks or months, the subcontractor receives payment in as little as one or two business days. These faster payments for contractors allow them to pay workers, order materials, and stay committed to the job.

The Balance is Cleared When the Client Payment Comes In

When the project owner’s payment comes through, you’ll normally reimburse the third-party funder.

Viva’s process is a little different here because we collect the balance for you and then send you anything that has not already been disbursed when your client pays.

Key Benefits of Early Payment Programs for Subcontractors

Early payment programs offer many benefits to GCs and subcontractors. We’ll review a few below.

1. Improve Cash Flow Management for Subcontractors

When payments are delayed, subcontractors often dip into personal reserves, juggle credit lines, or delay material purchases. Early payment programs give them steady, predictable access to funds, which supports healthier financial operations and stronger financial performance.

2. Attract the Best Talent

Skilled crews are selective about where they invest their time. Fast and transparent payments are key here. With early payment terms, attracting subcontractors with better payment terms is easy.

3. Reduce Payment Disputes

The longer subcontractors wait for payment, the more likely tensions are to build. By preventing subcontractor payment disputes before they start, early payment programs keep relationships collaborative and reduce the need for intervention.

4. Make It Easier for Subcontractors to Secure Materials and Equipment

Eight in ten subcontractors say rising costs are negatively impacting their business, per CURT. This hike has resulted in an annual increase of $97 billion across the industry, which makes it even more difficult to carry costs for long periods of time. However, when subcontractors receive payment faster, they can invest in what they need right away. This helps prevent project slowdowns tied to supply delays.

5. Help Subcontractors Stay on Schedule and Hit Milestones

More than one-third of GCs say they’ve recently experienced work delays due to crew payment delays, according to Rabbet. On the flip side, predictable payments tend to result in predictable outcomes. When subcontractors know they’ll be paid promptly, they’re more likely to honor schedules, maintain full crews, and complete each phase on time.

6. GCs Can Receive Incentives

Each program operates a little differently. Some are more like loans, where the GC pays the balance back with interest. However, when you leverage a service like Viva’s Quick Pay Program, the subcontractor pays a small fee, and you receive a portion of it.

7. Strengthen Long-Term Subcontractor Partnerships

Subcontractors remember how you treat them, and that goes a long way toward building strong relationships that stand the test of time. We’ll explore this more below.

5 Ways Early Payment Programs for Subcontractors Strengthen Relationships

Now that we’ve covered the basics, let’s take a look at how programs like Viva Quick Pay impact your subcontractor relationships.

1. You Can Reduce Job Site Tension and Walk-Off Risk

Long delays in payment can strain even the strongest working relationship. When subcontractors are left waiting, the risk of job walk-offs, slowed progress, and reduced morale increases.

By offering prompt payment, you’re reducing financial risks in construction projects and making it easier for subcontractors to stay focused. That consistency also plays a major role in building trust with subcontractors.

2. You Build Loyalty Through Financial Predictability

When subcontractors know exactly when and how they’ll be paid, they’re more likely to prioritize your jobs and show up for the long haul. That level of predictability builds goodwill and positions you as a contractor they can count on.

3. Your Bidding Confidence and Quality Grow Stronger

Subs are more likely to bid competitively and provide higher-quality work when they know they won’t be chasing payments. That makes it easier to find strong partners and reduce your exposure to last-minute delays or budget overruns.

4. Your Construction Firm is Positioned as a Reliable Partner

More than two-thirds of subcontractors say they won’t bid on a project that’s associated with a slow payer, according to Rabbet. When subcontractors talk to each other, it helps to be known as the kind of GC or developer who pays on time. That reputation makes getting calls returned, bids submitted, and labor confirmed easier, especially on tight timelines.

5. Payment Disputes and Administrative Drag Are Reduced

Programs with clear terms remove ambiguity from the process. Instead of dealing with follow-ups and confusion around who owes what and when, subcontractors know exactly when they’ll be paid. That reduces the time your team spends on paperwork and keeps the working relationship from slipping into conflict.

How to Find the Best Early Payment Programs for Contractors

Because every program operates differently, it’s essential to keep an eye out for the small details when selecting a program. Let’s take a quick look at what to watch for.

Simple Enrollment for Both Parties

Programs that let both you and your subcontractors enroll quickly without excessive paperwork or long processing delays make it easier to get buy-in and keep jobs on track.

Work-Driven Payment Triggers

The best early payment programs for subcontractors release payment based on your approval for completed work, not owner disbursements. That gives you control and helps subcontractors feel confident about when their money will arrive.

Fast Turnaround Times

Look for programs that offer digital payments and can have cash to subcontractors within one or two business days. If funds take a week or longer to arrive, the benefits to your project timeline and subcontractor may be limited.

No Need to Front the Money Yourself

Top-tier programs allow you to repay the advance when funds from the developer or owner come in. That way, you’re not tying up capital or putting strain on your business in the process.

Clear Terms That Build Trust

Make sure the program provider works directly with your subcontractors and keeps the payment process transparent. When everyone knows where things stand, disputes drop, and relationships improve.

How To Set Up an Early Payment System

If you’ve never used an early payment program before, the setup might sound complicated, but it doesn’t have to be. In most cases, you’ll spend more time choosing the right partner than implementing the process itself. Let’s take a look at what the process usually entails.

Start by Identifying Key Subcontractors

When you use a program like Viva Quick Pay, you’re in control over which subcontractors qualify. While you can invite all subcontractors, many GCs focus on crews that consistently meet deadlines, communicate well, and work across multiple projects.

Choose a Program with Streamlined Onboarding

Look for a provider that keeps the paperwork minimal and offers hands-on support for getting started. You want something that integrates into your workflow.

Make Approval Part of Your Existing Process

Payments should be triggered when you approve completed work. That’s already part of your day-to-day operations, so the system should support it without adding delays.

Communicate Early with Subcontractors

When subcontractors understand how and when they’ll be paid, they’re more likely to participate and more likely to deliver. Give them a chance to ask questions and make it clear how the program benefits them.

Gain a Competitive Advantage in Construction Payments with Viva Capital

If you’re looking for a straightforward way to improve subcontractor relationships, reduce friction on the job site, and keep your projects moving, an early payment program can make all the difference. The key is in finding one that fits your business and is easy to implement, trusted by subcontractors, and flexible enough to work across a variety of projects. To explore how Viva Capital’s Quick Pay Program fits into your business strategy, get in touch.