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A RocketLevel guide for restoration owners and finance leads, backed by decades of experience in the trade. This is the GEM home for working capital on commercial work: the multi-year pivot and the 90-day pay cycle that comes with it. About an 11-minute read.
The pivot from residential and program work into commercial is one of the smartest moves a restoration owner can make. It is also one of the most underfunded. Residential and insurance work pays comparatively fast, commercial work pays slow, and the months you spend building the commercial channel are months you are spending cash you have not yet collected. You can win the right accounts, hire the right rep, deliver the work flawlessly, and still run your bank account dry in the middle of it, because the build outruns the cash before the cash comes back.
Plenty of owners do not see that gap until they are standing in it, so plan the funding before the push starts, and keep the business that pays for it fed.
The commercial build is cash-negative before it is cash-positive, and the window is long. Four things drain cash at the same time, in the same window.
The new commercial rep. Use your own market's number here rather than ours. As a planning placeholder we work from $75,000 in base salary, and treat that as a floor for someone who has done the job before. The real cash line is that base plus payroll burden, a truck or an allowance, a phone, and the months of ramp. Commercial sales cycles are long, so the rep is a cost on your books well before the first job they sourced ever bills, let alone collects.
The collection cycle stretches. In residential and insurance work, payment is relatively quick. Commercial runs longer, though not by the margins owners assume. Restoration has its own count: the Restoration Industry Association (RIA) 2025 Cost of Doing Business Report (page 33, FY2024 data) puts the industry average at 60 days, and the slowest revenue band is not the biggest companies but the $10.1M to $15M shops, at 91 days. The Construction Financial Management Association (CFMA) 2025 Construction Financial Benchmarker put days in accounts receivable at 55 across 1,558 US construction companies for FY2024, so a shop planning around 60 days sits a step behind the median contractor rather than ahead of it. What stretches a commercial job past that is position in the chain: you often work for one party (a general contractor or property owner) while getting paid by another (an owner's lender, or a chain of approvals above your direct client). Siteline's 2026 survey of 492 construction finance and operations professionals found 43 percent of subcontractors waiting more than 90 days for final payment and retainage, against 15 percent of general contractors, as Contractor magazine reported (the report itself is a gated download), and that tail is what you have to fund. The sourcing is in Ninety Days Is Where the Slow End of the Industry Sits. On that slow tail, the same dollar of revenue can stay tied up for months longer than it did in residential.
MSA mobilization. Winning a Master Service Agreement (MSA) or a preferred-vendor spot is the goal, but standing one up costs money before it earns any. Prequalification fees, insurance at commercial limits, the staffing and equipment to actually respond, and the readiness to mobilize on the account's terms are all spend that lands ahead of revenue.
WIP and retainage. Every active commercial job is work in progress (WIP): labor, materials, and equipment you have paid for but not yet collected on. On top of that, the commercial contracts we work usually hold 5 to 10 percent retainage until the very end, money you earned on day one and collect last. The percentage is negotiated, and whether your state caps it is set by state law, so look up yours and plan against the number your own contract and state allow. California, New York and New Mexico have already capped or barred it by statute, with the citations in Floating the Capital on a Large Loss. Retainage is also frequently excluded from a lender's borrowing base, so do not count it as capital you can draw against. Run three or five commercial jobs at once and the WIP stacks, because every new job opens a fresh gap before the old ones close.
Now stack all four in the same window, which in RocketLevel's experience of the programs we run lasts 12 to 36 months. The rep is salaried, the cycle is long, the MSA is mobilizing, and the WIP is climbing. The books can show a profit while the bank account is short for Friday's payroll. This is the same growth-consumes-cash dynamic covered generally in Cash Flow for Restoration Owners. For the float on one big job, see Floating the Capital on a Large Loss. This page covers the whole commercial book and the pivot that builds it.
The owners who pivot well are the ones who funded the gap on purpose, before it arrived. The danger is specific: the more successful the commercial push, the more cash it demands, because success means more concurrent WIP, more retainage outstanding, and a longer stretch before the channel pays for itself. Line up the capital early, size it to the real peak and price it into your commercial margins.
There are really only two sources of money for the pivot, and the strongest plans use both.
Reinvest program cash flow. The fastest-pay part of your business (your residential and insurance work) throws off cash today. Deliberately earmarking a portion of that cash flow to fund the commercial build is the cheapest capital you will ever find, because it has no interest cost and no lender. The discipline is to treat the commercial build as a funded internal project with its own budget, not as something the business absorbs by accident. The limit is also real: program cash flow alone is rarely enough to carry peak WIP plus retainage plus a salaried rep through a multi-year ramp.
Finance the gap. Where reinvested cash runs out, financing bridges the rest. Financing here should bridge a timing problem, not fund losses or paper over under-pricing: you have performed profitable work and the money is real, it is just parked in receivables for as many days as your own book actually runs. That is exactly what a line of credit is built for.