Texas law sets payment deadlines on construction projects and adds interest when they are missed. Interest is compensation, not cash flow. Here is how to plan around both.
Apply Now →Chapter 28 of the Texas Property Code is the state’s prompt-payment law for construction work. The payment-requirements section, Section 28.002, sets deadlines that start when a written payment request is received:
The chapter also contains exceptions, such as one for a good-faith dispute, so a late payment is not automatically a violation. Read the full chapter or consult an attorney for your situation. This page is general information, not legal advice.
Under Section 28.004, overdue amounts accrue interest from the day after the due date at 1-1/2 percent per month. On a $100,000 payment that is one month late, interest would be about $1,500, which is meaningful but small next to the cost of the delay itself.
For illustration only: if a $100,000 payment is 30 days late and you have a $15,000 weekly payroll, the late payment has forced you to cover about four payrolls, around $60,000, while collecting about $1,500 in interest. The statute compensates the delay modestly. It does not pay the crew.
| Position | Gets paid after | Practical effect |
|---|---|---|
| Owner | Lender or own funds | Controls the start of the chain |
| General contractor | Owner pays, up to 35 days after request | Carries sub and supply costs in the meantime |
| Subcontractor | Contractor receives payment, then up to 7 days | Waits on two clocks in a row |
| Lower-tier sub or supplier | Sub receives payment, then up to 7 days | Waits on three clocks in a row |
The lower you sit in the chain, the longer the wait stacks, and the less cash cushion most firms at that level have.
The right bridge is sized to the unfunded weeks: payroll, materials and fuel between finishing the work and receiving the payment. Texas Biz Funding considers requests from $25,000 to $5,000,000, funded in as little as 24 hours after approval. Sole proprietors, which includes many small subs, can apply, and the five-minute application uses a soft credit pull.
Residential remodeling and long-haul trucking have different cash dynamics, and this page makes no promise of funding for them.
Under Section 28.002, not later than the 35th day after the owner receives the payment request.
Not later than the seventh day after the contractor receives the owner’s payment.
Section 28.004 provides interest from the day after the due date at 1-1/2 percent per month.
Yes. The chapter includes exceptions such as a good-faith dispute, so check the full text for your facts.
No. It compensates the delay modestly after the fact, but payroll is due on its own schedule.
Three months of business bank statements and a 5-minute application. FICO 500+ considered. $25,000 to $5,000,000, funded in as little as 24 hours.
Apply Now →It takes about two minutes and it will not affect your credit score.
No obligation • No impact to your credit score
