A contractor loan is the financing a Bartlett, TN trade uses between jobs: a credit line for materials, equipment financing for machines, and working capital for payroll while a general contractor holds payment. The right mix depends on how long each dollar is out. A funding partner reviews the request and makes the decision on terms.
What a contractor loan covers for Bartlett, TN trades, a credit line vs equipment loan comparison with invented figures, payroll while a general contractor holds payment, and the records in a contractor file.
What a contractor loan is and how trades use it between jobs
A contractor loan is not one product. The phrase covers the financing a construction trade uses to keep working while money is tied up in jobs: a credit line for materials, an equipment loan for machines, and working capital for payroll while a customer or general contractor holds payment. Between jobs, the same tools carry a crew through the weeks when the next contract has started but has not paid yet.
The gap has a simple shape. A trade buys materials and pays its crew first, invoices when work is done, and collects later. The longer the wait and the bigger the job, the more cash the business has out at once:
- Materials bought at the start of a job and billed weeks later
- A machine needed for one contract that keeps earning on the next
- Payroll that runs every two weeks no matter when the check arrives
- Retainage held back until the whole project closes
- A bid bond or deposit on a new contract while the last one is still open
Residential permits give one view of new-home work in the county: Shelby County, TN authorized 1,230 new privately owned housing units in 2025, fewer than the 2,061 of 2024 (Census Building Permits Survey). For a trade tied to new homes, a lower permit count can mean longer stretches between contracts, which is the stretch a credit line is sized for.
Credit lines for materials vs equipment loans for machines
Materials and machines have different lives, so they belong on different products. A line of credit is drawn when the order goes in and paid down when the customer pays, so interest runs only for the weeks the money is out. Equipment financing spreads a machine over the years it works, with the machine as collateral.
| Question | Credit line for materials | Equipment loan for a machine |
|---|---|---|
| What it pays for | Lumber, wire, pipe, fixtures for a job | Excavators, lifts, trailers, generators |
| How long the money is out | Weeks, until the job pays | Years, matched to the machine |
| Collateral | The business and its receivables | The machine itself |
| Payment shape | Interest on the drawn balance | Level monthly payment |
| When it goes to zero | Each time the balance is paid down | At the end of the term |
Illustration only, invented figures: a remodeling contractor draws $24,000 for materials and pays it back from the job 45 days later. At an invented annual rate of 15%, the draw costs $443.84 of interest. The same contractor finances a $68,000 mini excavator over 48 months at an invented 9.5%, for $1,708.37 a month. Putting the materials on a 48-month loan instead would keep a payment running for years after the job closed.
Payroll while a general contractor holds payment
On commercial work, a general contractor pays a subcontractor after the owner pays the general contractor, and part of each payment can be held back as retainage until the project is complete. The crew still gets paid every two weeks, so working capital or a credit line covers the paydays that fall inside the wait.
Illustration only, invented figures: an electrical subcontractor bills a $150,000 job in 3 monthly invoices of $50,000. In this example, the general contractor pays each invoice 45 days after it is sent and holds 10% back, so each check is $45,000 and $15,000 waits until the project closes. In this example, a crew payroll of $11,800 every two weeks means 3 or 4 payrolls inside each 45-day wait, depending on where the first payday falls: $35,400 to $47,200 paid before the first check arrives.
Those are large sums at county pay levels. Specialty trade contractors in Shelby County, TN reported $935.6 million of 2023 payroll for 13,240 employees in the March pay period (CBP, NAICS 238), or about $70,668 a year per employee by our arithmetic. A held payment on even one job can leave several paydays to fund from the business account.
What a lender reviews in a contractor file
Each funding partner sets its own list. A contractor file can include:
- A work-in-progress schedule: each open job, its contract value, billed to date and paid to date
- An accounts receivable aging report, with retainage listed by job
- The signed contracts or subcontracts behind the largest receivables
- Any contractor license the work requires, with its number
- An equipment list with the year and hours of each machine, plus the quote for a new one
- The last filed business tax return, with bank statements for the operating account
- A schedule of current equipment payments and credit lines
The work-in-progress schedule matters because it shows money already earned but not yet collected. Nonemployer Statistics counted 6,881 construction businesses without paid employees in Shelby County, TN for 2024 (NAICS 23); for a one-person trade, the personal and business records can end up in the same folder.
The construction funding page has the county counts by trade, and the Eaglestone blog has the companion articles on daycares, franchise units and clinics.
By Eaglestone Funding Group · Updated
