Landing a Bigger Contract in Hillsboro, OR: Funding Payroll Before the First Draw

The gap a new contract creates

Most construction firms in Washington County, OR are small. Of the county's 1,826 construction employer establishments in 2023, 1,141, or 62.5%, had fewer than five employees (County Business Patterns 2023). In ZIP 97123 around our SE 2nd Ave address, the figure was similar: 62.3% of 162 construction establishments.

For a crew that size, a contract twice the usual scope means hiring or adding hours right away, while the first progress payment arrives only after work is inspected and the pay application is approved. The job may be profitable and the cash still runs short for a few weeks.

Count payrolls, not contract value

The useful question is how many payrolls fall between the start of work and the date the first draw clears, and how large each will be. Write down:

1. Every payroll date from mobilization to the expected first draw.
2. The gross wages and employer costs for each.
3. The expected draw amount after any retainage is held back.
4. A cushion for the draw arriving a week or two late.

If the draw, net of retainage, covers those payrolls, the gap is a timing problem with a clear end. That is what short-horizon funding is built for.

First route: a lump of working capital

Working capital pays out a lump sum and is repaid in fixed installments over a few months. It suits a single, well-defined gap. The risk is mismatch: if debits start before the draw lands, the first payments come out of the same account you are trying to protect. Ask when the first payment is due and line it up with the draw schedule.

Second route: draw on a revolving line

A business line of credit lets you draw for each payroll and repay when the draw arrives, paying interest only on what is outstanding. For a contractor who expects this situation to repeat with every new job, a line is usually the better long-term tool, because the limit is there for the next contract too. Lines take more preparation to set up, so it helps to arrange one before the bigger job starts.

Third route: an advance on receipts, carefully

A merchant cash advance is not a loan; the funder buys future receipts and collects them through a holdback or fixed debits. For contractors paid by check or transfer on draws, rather than by card, advances usually use fixed bank debits, and those debits keep running whether or not the draw is on time. If you consider one, total every remittance in dollars and compare it with the other two options first.

What partners will ask a contractor for

• The signed contract and its draw schedule, including retainage terms.
• Business bank statements covering the last several months of deposits.
• A receivables list, if earlier jobs are still unpaid.
• Your payroll calendar for the contract period.

Our contractor and construction financing page covers the equipment side of the same jobs, and the Washington County figures are on our Hillsboro, OR page.

Specialty trades feel it first

Washington County's 1,081 specialty trade contractors averaged about 12.6 employees each in 2023, roughly double the 5.9 averaged by its 689 building contractors (our arithmetic from County Business Patterns 2023). An electrical, plumbing or framing subcontractor with a dozen people on a weekly payroll feels a late draw sooner and harder than a small general builder, which is why trades are among the most frequent payroll-gap callers.

A checklist before you bid the next big job

1. Ask the general contractor or owner how and when draws are paid.
2. Estimate the payrolls before the first draw.
3. Decide which funding structure fits, and arrange it early.
4. Keep the business's state and city records current so a partner review is not delayed.

Other Washington County notes sit on the blog.

By Quarryfield Capital Group · Updated 2026-10-16