A flooring and tile contractor that installs in new homes for local builders pays for tile, plank and underlayment weeks before the builder pays for the finished floor. When three of those jobs overlap, one commercial line of credit can carry all of them, and the numbers worth knowing are the peak balance and the interest each job uses.
Three invented jobs drawn on one line at an 11.95% annual rate, with the interest charged back to each job, and why a limit sized to the largest single job fell short in this case. Every dollar figure and day count is made up for the illustration.
Commercial line of credit draws across three overlapping Springfield, TN flooring jobs
Take an invented flooring and tile contractor with three houses under way for two builders. Each job needs its materials on site before the crew starts, and each builder pays when the floor is finished and checked.
| Job | Materials drawn | Draw day | Builder pays | Days on the line |
|---|---|---|---|---|
| Job A | $7,840 | Day 3 | Day 38 | 35 |
| Job B | $11,260 | Day 17 | Day 61 | 44 |
| Job C | $6,395 | Day 29 | Day 70 | 41 |
In this invented calendar, all three draws are on the line from day 29 until day 38, when the first builder pays. The invented balance in those days is $25,495, the peak for the whole stretch. After day 38 the balance falls as each builder pays and the contractor clears that job’s draw.
A line works this way because each draw is a separate amount with its own start and end. Interest runs only on what is drawn and only for the days it stays out, and the limit frees up again as each job’s draw is paid off. The line of credit page explains draws, paydowns and limits in general terms.
Business line of credit interest charged back to the job that used it
At an 11.95% annual rate, worked on a 365-day year, the sample interest on each draw follows from its amount and its days on the line:
- Job A: $7,840 for 35 days comes to $89.84 in this example
- Job B: $11,260 for 44 days comes to $162.21 in this example
- Job C: $6,395 for 41 days comes to $85.84 in this example
- All three invented jobs together: $337.89
Set against the materials each job drew, that interest is 1.1% for job A, 1.4% for job B and 1.3% for job C in the worked case. Job B costs the most because it is the largest draw and the one left on the line longest.
Booking each draw’s interest to its own job keeps the job costing honest. If the next house for the same builder is the same size and the same payment terms, the bid can carry that cost as a line item instead of losing it in overhead. A partner may also charge a draw fee or an annual fee; those belong in the same job-by-job tally.
Construction line of credit size: the peak balance, not the largest job
An owner sizing a line from one job in this example would look at job B, $11,260, and might ask for $20,000 to be safe. In this example, that limit runs short. By day 29 of the worked case, jobs A and B have drawn $19,100, leaving $900 of room, and job C needs $6,395.
With the $20,000 invented limit, job C’s tile waits 9 days until the first builder pays on day 38, and the crew waits with it. Only the peak in the invented draw calendar, $25,495 here, shows the size that keeps all three jobs moving.
A partner decides any limit, and it may set a smaller one than the owner asks for. A request that lays out the overlapping jobs, their materials and the dates each builder pays shows why the amount asked for is the amount the work needs. The request goes through the short request form or a call to (615) 694-4278.
When a flooring contractor’s cost belongs on another page
A line fits materials that come back as cash when a job is paid. Two costs a flooring contractor carries do not work that way. A ride-on floor scraper, a tile saw station or a large floor grinder is used for years, so it fits a fixed term on equipment financing, where the machine can secure the agreement.
Wages for a crew hired ahead of a large multi-house contract are the other cost: they go out every payday for months, and working capital pays them as one lump sum on a fixed schedule. Keeping both off the line keeps its limit open for the next job’s materials.
Building finishing contractors are a small group in the county. County Business Patterns counted 22 employer establishments under NAICS 2383 in Robertson County, TN in 2023, and 13 of them had fewer than five employees. Nonemployer Statistics counted 234 building finishing contractors with no paid employees in the county for 2024. The other five posts are listed on the Swiftpine Loans blog.
By Swiftpine Loans · Updated
