Said It Here

How to finance big contracts when customers pay in 90 days

Upfront material and weekly payroll expenses drain bank accounts months before slow-paying clients finally clear their invoices. This massive cash flow gap forces business owners to risk missing payroll and nearly bankrupts them on jobs that should have made their year.

What people tried

Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.

  1. 1
    Negotiating for deposits or progress billing
  2. 2
    Using revolving lines of credit at a bank
  3. 3
    Utilizing factoring houses or purchase order financing
  4. 4
    Limiting client revenue concentration

In their words

Unedited, most upvoted first, each linked to the thread it came from.

“I had to buy all the material up front, pay my guys weekly to do the work over three months, and the client paid on ninety day terms after delivery.”source ↗

“So for nearly five months I was funding a job worth more than my whole previous year out of a bank balance that could not cover it.”source ↗

“There was a week I genuinely thought I was going to miss payroll on the job that was supposed to make my year.”source ↗

_muchhlovenetra · r/smallbusiness · 768 upvotes

“The contract almost bankrupted me a couple times over. The first six months were honestly terrifying.”source ↗

m1cknobody · r/smallbusiness · 152 upvotes

Where this came up

r/smallbusinessaccounts receivablecash flow

People with this problem also raised