Draw schedule?

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LarryFine

Master Electrician Electric Contractor Richmond VA
Location
Henrico County, VA
Occupation
Electrical Contractor
What is a typical draw schedule for a small commercial job ( name brand sandwich shop)? This is a first for me as a contractor.
1/3 down, remainder after done, unless there's a reason to keep back, say, 10% for punch/final/CO, ect.

If there will be intermediate rough-in inspections, like behind walls or ceilings, you can divide it further.

For example, 1/4 down, a fraction after each inspection (depending on how many), the final at the end.
 

TxShocker

Member
Location
Texas
Around here (commercial and Industrial I do not know about Resi work) if you tried to get a down payment or draw with out doing any work you would be laughed out of the room, you do the work then you get paid.
 

rodneee

Senior Member
Around here (commercial and Industrial I do not know about Resi work) if you tried to get a down payment or draw with out doing any work you would be laughed out of the room, you do the work then you get paid.
you are so right....i don't know 1 person east of the mississippi who ever got a down payment; yet everybody on this site claims it is standard operating procedure...
 

satcom

Senior Member
you are so right....i don't know 1 person east of the mississippi who ever got a down payment; yet everybody on this site claims it is standard operating procedure...
I can't buy a soft drink with out paying before they give it to me, so what is so strange about securing a much larger purchase before you hand over material and labor? can you buy a car east of the mississippi without a deposit?
 
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rodneee

Senior Member
I can't buy a soft drink with out paying before they give it to me, so what is so strange about securing a much larger purchase before you hand over material and labor? can you buy a car east of the mississippi without a deposit?
if i follow your logic i have to ask:::: what if the supply house asked you for a down payment at the beginning of the monthly billing cycle before you ordered any material...would you pay it...most would not...yet many they think they should get deposits but not pay deposits...
 

satcom

Senior Member
if i follow your logic i have to ask:::: what if the supply house asked you for a down payment at the beginning of the monthly billing cycle before you ordered any material...would you pay it...most would not...yet many they think they should get deposits but not pay deposits...

When I purchase material they have my money before i leave the supply house, they have my signature before I leave with the material, that signature is a loan, they have secured their money, I don't know anyone in business that does not secure their money, you may not require a deposit, from customers that have established credit, and sign a contract and credit agreement, many of us have established credit, and that is our down payment to our suppliers.
 
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wireguy8169

Senior Member
Location
Southern Maine
Its a double edge sword . I have had it both ways, I always try to get something down when dealing directly witht he client, even if its just for special order, but most GC' I have worked with will give a small down payment I think cause they know how it is carrying cost. At the same time how do they know your not going to take the money and run, just like one might think they will get work done and not get paid. I have only ever once not gotten paid and that was a service call for my tax person, for $75 bucks hows that for a stiff :D

Anyhow get what you can but realize its not always going to be the case, some jobs you may not see a check for 30 days after you bill.
 

satcom

Senior Member
Its a double edge sword . I have had it both ways, I always try to get something down when dealing directly witht he client, even if its just for special order, but most GC' I have worked with will give a small down payment I think cause they know how it is carrying cost. At the same time how do they know your not going to take the money and run, just like one might think they will get work done and not get paid. I have only ever once not gotten paid and that was a service call for my tax person, for $75 bucks hows that for a stiff :D

Anyhow get what you can but realize its not always going to be the case, some jobs you may not see a check for 30 days after you bill.
It is not a double edge sword, the GC in most cases, has a secured construction loan contract, and should have no problem making progress payments to his subs, and when an EC contracts direct with a customer, he also need to secure his payments, as EC's we are licensed and bonded, so that how do they know your not going to take the money and run, is not a valid excuse in most states where licenses are required, it appears we must have a large number of guys, that risk their assets, by trying to run a bank, when your income and family survival depends on your getting paid, you learn to operate like a business, and give credit only to those worthy of receiving it.
 

cdslotz

Senior Member
I can't buy a soft drink with out paying before they give it to me, so what is so strange about securing a much larger purchase before you hand over material and labor? can you buy a car east of the mississippi without a deposit?
Unfortunately, that is the reality of commercial construction. A down payment and draws ain't gonna happen!
Commercial developers, owners, GC's don't want subs that are not financial viable enough to work on a job with an AIA contract and schedule of values. They are not going make any special exceptions either.
I remember when I started out I had to build up my line of credit to front the payroll until I received payment after 45 days. It got real sketchy let me tell you. I can leverage the supply houses for that long.
Also, be very wary of out of town GC's that do chain restaurants or mall work (mall rats). They come in town, sign you up, build that store in 30 days, you rack up a bunch of changes that they will claim are not approved yet, and then they are gone and you haven't even submitted a bill yet. Then you are fighting them for months getting your base contract money and wind up settling for pennies on the dollar for the changes you have already performed.
Steer clear of the mall rats!
 

nhfire77

Senior Member
Location
NH
I don't understand the logic. I just completed a job that had a 90 day window to complete. We had to start day one, and had to have 75% finished by 60 days and finished by a the 90th day. The company wired us 33% down and 33% at the 60th day and the remainder after completion/acceptance. It was a ~$30,000 job, 90% labor, majority of parts supplied to us. These were the terms dictated to us based (by the GC) They know that labor costs money, and people need to get paid. Instead of having to lay out thousands of labor costs in advance.
 

LarryFine

Master Electrician Electric Contractor Richmond VA
Location
Henrico County, VA
Occupation
Electrical Contractor
you are so right....i don't know 1 person east of the mississippi who ever got a down payment; yet everybody on this site claims it is standard operating procedure...
I'm east of the Miss, and I get one on almost every job. I'm not going to apply for a permit without a signed contract and I'm not going to leave materials at a site, installed or not, without at least most of it paid for.
 

wireguy8169

Senior Member
Location
Southern Maine
It is not a double edge sword, the GC in most cases, has a secured construction loan contract, and should have no problem making progress payments to his subs, and when an EC contracts direct with a customer, he also need to secure his payments, as EC's we are licensed and bonded, so that how do they know your not going to take the money and run, is not a valid excuse in most states where licenses are required, it appears we must have a large number of guys, that risk their assets, by trying to run a bank, when your income and family survival depends on your getting paid, you learn to operate like a business, and give credit only to those worthy of receiving it.
I guess I should have stated in my opinion its a double edge sword...cause to me it is and not one job I did for the state of PA did we get a penny up front, but always got paid and typically we were not under the GC we were a prime. I did not consider it risking assets, and I have read of several large companies that skipped or started a job and did not finish due to financial issues. and not every job (at least in PA) required a bond as a matter of fact till I started to do goverment jobs I was never required to have a bond....and until someone shows they are unworthy of credit you never know it and by then its too late.
 

sparky=t

Senior Member
Location
Colorado
i don't understand the logic. I just completed a job that had a 90 day window to complete. We had to start day one, and had to have 75% finished by 60 days and finished by a the 90th day. The company wired us 33% down and 33% at the 60th day and the remainder after completion/acceptance. It was a ~$30,000 job, 90% labor, majority of parts supplied to us. These were the terms dictated to us based (by the gc) they know that labor costs money, and people need to get paid. Instead of having to lay out thousands of labor costs in advance.
sign me up!! :d
 

jmsbrush

Senior Member
Location
Central Florida
Where I'm from, I get 25% upfront on smaller residential jobs.
On commercial jobs, I get nothing. I finance the job. It stinks but thats how it is right now.
 

rodneee

Senior Member
When I purchase material they have my money before i leave the supply house, they have my signature before I leave with the material, that signature is a loan, they have secured their money, I don't know anyone in business that does not secure their money, you may not require a deposit, from customers that have established credit, and sign a contract and credit agreement, many of us have established credit, and that is our down payment to our suppliers.
what does "secure their money" mean???
 

krisinjersey

Senior Member
Floating jobs

Floating jobs

You've got alot of confidence in your GC paying you on time if you're not collecting money upfront. Credit is extended to credit worthy companies, and it comes with the penalty of interest. I'm not going to place an order for $250,000 worth of equipment on the hope that I might get payed. That's how guys fail. It's a poor business decision to take uneccessary risk like that. You have to cover yourself and protect your business. And the idea that anyone east of the Mississippi not collecting a deposit is complete bull. I only know a handful of shops that have done it, and of those more than half are closing or in rough shape financially. If you don't have the guts to stick your hand out for a down payment, where do you get the guts to stick your hand out for a paycheck? If the only way you can get a contract is to float the job, do you really want the job that bad? And what kind of GC is asking you to carry that kind of risk? It's like signing a lean waiver, it's just bad practice. I get a deposit on EVERY JOB regardless of size(New Jersey is east of the Mississippi). It keeps the bills payed. If the customer doesn't want to pay the deposit, I don't want the risk or the headache of trying to collect later.

Always 1/3 down, 1/3 at rough inspection-before trim begins, 1/3 at final inspection or CO or TCO which ever occurs first. Customer may with hold 10% or $1000 (whichever is smaller) pending final inspection. It's in EVERY contract we put out. Change orders 1/2 down, balance at completion of change order work. We're not a bank. I don't get payed to chase money! The only contracts I'll look at that require me to float are Federal and they take forever to pay, but the money is guaranteed. And if you offer a 10% discount for 15 days they have to take it and pay you in 15 days.
 
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