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Sub contractor down payment

CaliforniaCash Flow

Good Morning. I own a plumbing company in CA. We have been in business since 91'. We have been going through some major growth recently. I am currently bidding a project that cost wise, is much larger then we have ever done. In the contract payment terms, would it be normal for us to ask for 15% down from the GD as a initial deposit to get this project off the ground?

2 replies

Nov 30, 2022

This would depend on the type of project you are doing. On certain projects you are limited in what type of down payment you can request and asking for 15% would violate the rule. Given your recent growth and expansion, you should have an experienced construction attorney that you can go to with these types of questions, who can guide you as you continue to grow and expand your business. 

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Dec 2, 2022
If you’re working for the GC and not a homeowner, there are no limits to the amount of down payment you can ask. I’ve often seen subcontractors ask for 30% down depending on the amount of materials and labor on a project.
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