SAN FRANCISCO, CA — Subcontractors continue to carry significant cash-flow risk while waiting to get paid for completed construction work, according to The State of Subcontractor Billing in 2026, an industry report released by Siteline. The report is based on a May 2026 survey of 492 construction finance and operations professionals.

The survey found that 92% of subcontractors floated payroll from their own pockets during the past year while waiting for payment, with 28% doing so most months. For trade contractors that are often among the first companies on a project and among the last to be paid, that can leave substantial amounts of working capital tied up in active and completed work.

Retainage Can Keep Subcontractor Profit Tied Up for Months

Retainage is a particularly significant source of payment delays. 43% of subcontractors reported waiting more than 90 days to collect final payment and retainage, compared with 15% of general contractors. Nearly one in five subcontractors waits six months or more.

Because retainage can represent a significant portion of a subcontractor’s expected margin, extended payment periods can leave contractors carrying the cost of labor, materials and other project expenses well after their work is complete.

“Retainage puts subcontractors in a difficult position. It keeps us from money we’ve already earned while we still have employees, suppliers, and vendors to pay,” said Martin Press, Founder and President of Press Mechanical Contractors and Secretary/Treasurer of the American Subcontractor Association (ASA).

“ASA is working to expand options such as retainage bonds that give subcontractors access to those funds sooner, while still providing appropriate protection for the project," Press said. "At the same time, subcontractors need to manage the parts of the payment process they can control—billing accurately and on time, staying ahead of requisitions and change orders, and knowing exactly where their money stands.”

Billing Errors Create Preventable Payment Delays

The report also identifies internal billing processes as an area where subcontractors can reduce payment delays. Respondents named pay applications submitted with errors or omissions as the biggest internal driver of their own late payments.

Preparing and tracking those applications also consumes substantial staff time. 67% of subcontractors spend 11 or more hours per month preparing, submitting and tracking pay applications—roughly the equivalent of a part-time job.

Mechanic’s lien deadlines present another risk. 56% of respondents said they had missed a critical mechanic’s lien deadline during the past two years, potentially putting an important payment protection at risk.

Better Billing Visibility Can Help Contractors Manage Cash Flow

While subcontractors cannot control when owners and general contractors make payments, the report points to billing and accounts receivable management as areas where trade contractors can improve visibility into incoming cash.

“Subcontractors have become the construction industry's bank, and it's a role no one asked for,” said Claire Wilson, Co-Founder and CEO of Siteline. “We can’t control how the industry pays, but our report shows that the better handle subcontractors have on their billing and A/R, the less time and money they lose to delays they can prevent. That’s exactly why Siteline exists: to give subs visibility into their cash flow so they can properly plan, get paid faster, and shorten the time they’re left financing the work.”

Contractors See Opportunity to Improve Payment Processes

Despite the ongoing cash-flow pressures, 73% of subcontractors surveyed said they are optimistic about their financial outlook. A majority also indicated they are prepared to invest in tools that can help improve their financial operations.

The State of Subcontractor Billing in 2026 examines where payment delays begin, the costs they create for trade contractors and the steps subcontractors can take to narrow the gap between completing work and collecting payment.

To download a copy of the report visit https://www.siteline.com/digital-download/the-state-of-subcontractor-billing-in-2026.