Working Capital for Electrical Contractors in Texas

Copper first, payment later

Electrical work is material-heavy and labor-heavy at the same time. Conduit, wire, panels, fixtures and switchgear are bought as the job moves forward. Journeymen and apprentices are paid weekly. The customer, whether a general contractor, a developer or a facility owner, typically pays on a billing cycle that trails the work by weeks.

An electrical contractor doing commercial or industrial work is often paid in draws or progress payments. A contractor can be correct about the schedule, correct about the price and still run out of cash because the money for last month's work is stuck in someone else's approval chain.

The timeline of a typical job

1. Bid and award. Pricing is set before material costs and labor hours are known with certainty.
2. Mobilize. Materials are ordered, often on supplier terms that are shorter than the owner's payment terms.
3. Rough-in and trim. Payroll runs every week. Inspections can pause the job.
4. Bill. A progress billing goes to the general contractor, who then bills the owner.
5. Collect. The payment arrives after the chain has finished approving.

Steps two through four produce the cash gap. It grows with every job running at once.

What Texas law says about slow payment

Two Texas statutes come up in these conversations. Under Texas Property Code section 28.004, overdue amounts on a construction payment accrue interest from the day after the due date at one and a half percent per month. And under section 53.052, a lien affidavit is filed with the county clerk, with the deadline for an original contractor on a non-residential project being the fifteenth day of the fourth month after the month in which the work was completed. This is general information, not legal advice; talk to a construction attorney about your own situation.

The practical point is that the law protects your right to be paid, but it does not put money in the account in time for payroll. Working capital covers that stretch.

What it looks like when you use it

For illustration only: a contractor wins a second job while the first is waiting on a draw. Taking the second job means buying material and adding a crew, but no cash is coming for a month. Working capital makes that possible.

We describe commercial and trade electrical work here. Sole proprietors can apply, including one-person shops. The application takes about five minutes and uses a soft credit pull.