Construction Factoring: Fuel Your Growth Without the Wait
In the construction industry, cash flow is king, but it’s often held hostage by 30, 60, or even 90-day payment cycles. Between managing payroll, purchasing raw materials, and keeping equipment running, waiting for a general contractor or municipality to pay can stall your progress.
At Star Funding, we specialize in construction receivables finance. With over 26 years of experience supporting small and medium-sized businesses across the United States, we provide the liquidity you need to take on bigger projects and bridge the gap between completed work and received payments.
Construction Funding Tailored to Your Trade
Traditional bank loans can be difficult to secure for subcontractors and trades, especially when your balance sheet is tied up in “work in progress.” Construction factoring offers a flexible alternative by turning your unpaid B2B invoices into immediate working capital.
We offer factoring facilities ranging from $500,000 to $10 million, specifically designed for commercial projects. While we support a wide array of industries, our construction program is built for professional contractors who need reliable, scalable capital.
Program Highlights & Qualifications
We provide transparent terms to help you manage your overhead with confidence. Our construction receivables program is available in all 50 states and features:
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No Monthly or Annual Minimums: You aren’t penalized for how much or how little you choose to factor.
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Flexible Billing: We accept progress and milestone billings, even those with “paid when paid” terms.
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Simple Agreements: 12-month minimum contracts with straightforward structures.
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Nationwide Reach: Funding available for B2B projects across the entire U.S.
| Feature | Requirement |
| Facility Size | $500,000 – $10 Million |
| Minimum Eligible AR | $500,000 |
| Invoice Age | Must be under 90 days old |
| Project Type | B2B/Commercial only (No residential) |
| Principal Credit | 650+ Score Required |
Important Guidelines
To maintain the health of your funding facility, we adhere to the following industry-standard criteria:
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Commercial Focus: We fund B2B projects only; residential work is not eligible.
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Non-Bonded Work: We do not factor invoices that are covered by a payment or performance bond.
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Retention: Funding is provided on the face value of the invoice, excluding retention amounts.
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Verification: Account debtors must be willing to sign a simple estoppel (acknowledgment of the invoice).
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Guaranty: A personal guaranty from the company principals is required.
Why Star Funding?
With over two decades of experience, we understand the nuances of the construction cycle. We don’t just provide cash; we provide a partnership that helps you navigate the complexities of construction receivables finance.
Note: Star Funding provides financing for construction and various other industries, excluding medical receivables and transportation.
Construction Factoring: Frequently Asked Questions
Navigating the financial side of a construction project can be as complex as the build itself. Here are the top ten questions we receive about construction receivables finance at Star Funding.
1. What exactly is construction factoring?
Construction factoring is a financial tool where you sell your unpaid B2B invoices (receivables) to Star Funding at a discount. In exchange, you get an immediate cash advance—typically within 24 hours—allowing you to cover payroll and materials without waiting 60+ days for a customer to pay.
2. Is this a loan that adds debt to my balance sheet?
No. Factoring is the sale of an asset (your invoice). Because it is not a loan, you aren’t taking on new debt, making it an ideal solution for companies that may not qualify for traditional bank lines of credit.
3. Do you fund residential projects?
At this time, we specialize exclusively in B2B (Business-to-Business) projects. This includes commercial developments, industrial builds, and government contracts. We do not provide funding for residential or “homeowner” work.
4. What is a “Simple Estoppel,” and why is it required?
An estoppel is a short document signed by your customer (the General Contractor or Project Owner) acknowledging that the work has been completed and that they intend to pay the invoice to Star Funding. This ensures all parties are on the same page and reduces the risk of payment disputes.
5. Can you fund “Paid-When-Paid” or “Paid-If-Paid” contracts?
Yes! We understand that many subcontractors operate under “paid when paid” terms. Unlike many other firms, Star Funding is comfortable factoring progress and milestone billings that contain these common construction clauses.
6. Do you fund bonded projects?
No. Our program excludes bonded invoices. Because a surety company has a primary claim on the assets of a bonded job, those invoices are not eligible for our factoring program. We focus on unbonded commercial accounts.
7. How does retention (retainage) work with factoring?
We provide funding based on the face value of the invoice, minus the retention amount. Since retention is held until the very end of a project (often months or years later), we do not advance funds against it. However, once the retention is billed and becomes a current invoice, it may then become eligible for factoring.
8. What are the credit requirements for my business?
We prioritize the creditworthiness of your customers (the ones paying the invoice) over your own. However, we do require that the company principals have a credit score of 650 or greater and provide a personal guaranty to establish a professional partnership.
9. Are there monthly minimums or long-term commitments?
We believe in flexibility. While we require a 12-month minimum contract to establish a stable relationship, there are no monthly or annual volume minimums. You choose which invoices to factor and when.
10. Can I factor invoices that are over 90 days old?
No. To ensure a healthy cash flow cycle, we only factor current receivables. Invoices must be under 90 days old to be eligible for our program.