Business FinancesQuestion 1213 of 1632
Which of the following BEST reduces a contractor's need for outside financing on a project?
a.Larger retention withheld by the owner
b.Prompt billing and quick collection
c.Paying suppliers before invoicing the owner
d.A bigger deposit refunded at closeout
Explanation
Money borrowed is money the contractor did not collect, so billing the moment work is complete and chasing the payment shortens the gap that a line of credit would otherwise fill. Larger retention withholds more of the earned money for longer and increases the need for financing. Paying suppliers ahead of billing moves cash out before it comes in. And refunding a deposit hands back cash the contractor already holds.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)