Financing for Contractors in Lorain, OH: Mini Excavators, Concrete Mixers and Bid Deposits

A contractor's cash goes out before a customer pays. A line of credit covers the costs that come and go with each job:

• Rebar, form lumber and concrete orders the supplier wants paid before the pour is billed
• Bid deposits on jobs that call for one, returned on the bid terms
• Fuel, blades and small tools between jobs
• Payroll in the weeks before a pay application clears

Each draw is repaid when the job pays, and interest runs on what is drawn. Lorain County, OH counted 414 specialty trade contractors and 157 construction-of-buildings employers in 2023 (County Business Patterns); the Lorain, OH page covers ZIP 44052.

Illustration only, invented figures: a concrete contractor prices a towable mixer at $4,600 and an electric scissor lift at $14,300, $18,900 together. With an invented 11% annual rate and a 42-month term, our arithmetic gives $544.20 per month: $22,856.40 across the term, $3,956.40 of it interest.

A mini excavator or a job-site trailer can join the same request when the quotes arrive together, and the equipment financing page compares used and new pricing for a skid steer. Machines that stay in use for many years can carry a longer term than tools that wear out sooner.

Each quote should show the model and, for anything used, the year and the hours on the meter, plus delivery. A used mini excavator with its hours listed lets a partner set the term against the machine's remaining life, and a partner may ask for a photo of the hour meter or an inspection report before making any offer.

Some bids require a deposit with the bid, returned if the contractor is not selected or once the contract is signed, as the bid terms say. Illustration only, invented figures: a 5% deposit on a $160,000 bid is $8,000.

Drawing that $8,000 from a line for 30 days at an invented annual rate of 13% costs $85.48 in interest by our arithmetic, and the operating account keeps its cash for payroll and suppliers. When the deposit comes back, the draw is repaid.

Two or three bids out at once multiply the amount tied up, so the line limit needs to fit the bids the contractor expects to have out at one time.

Renting by the day makes sense for a machine used now and then; owning makes sense once it is on site most weeks. Illustration only, invented figures: a mixer rents for $95 a day, and the contractor uses one 9 days a month, $855 in rent.

Financing the $4,600 mixer over 24 months at an invented 11% annual rate costs $214.40 a month, $640.60 less than that month's rent. At $95 a day, two rental days ($190) cost less than the $214.40 payment and three ($285) cost more, so a contractor using the mixer two days a month or fewer would pay less by renting, before fuel, upkeep and storage.

A lease sits between the two: a set monthly payment with an end-of-term choice to return, renew or buy.

Both are timing gaps, but they behave differently:

• A bid deposit comes back on the bid terms, so the amount and the expected return date are known up front.
• A progress-billing wait runs from the day the work is done to the day the pay application is paid, and the amount grows with each week of payroll and materials on the job.

A line of credit can carry both. A single large gap on one job can also fit a working capital loan with a fixed payment. Lorain County, OH counted 102 building finishing contractors in 2023, 71 of them with fewer than five employees (County Business Patterns).

Records that show the timing help in either case: the bid terms with the deposit return clause, the job's schedule of values with its pay application dates, and an aging list of what customers owe. With those in hand, the call can size the line to the gaps the contractor actually carries.

Progress billing and retainage are priced week by week on the blog.