Too Much Debt or Not Enough Capital?
It’s a dilemma I see every day: contractors either have too much debt—or not enough capital to fund growth.
Which one sounds like your business?
For trade contractors, capital is the lifeblood of growth. But too often, it comes at a cost: missed paychecks, high stress, or sleepless nights.
Growing revenue isn’t always the answer. In fact, it can make things worse if your business is underfunded. That’s where the right kind of debt can make a difference. Used strategically, debt can fuel your growth instead of choking it.
How Much Capital Do You Actually Need?
Start with the 10 percent rule.
You should aim to have 10 percent of your annual revenue available in cash or credit reserves.
For a $3 million business, that means $300,000
This cushion covers payroll, operating expenses, and bridges the gap during 60–90 day payment cycles
Ideally, this 10 percent should be cash—but you can also count any unused portion of your bank line of credit. Just be sure that if you tap that line for payroll, you repay it quickly once you collect on the job it was used to cover
If you're like most contractors, you may not have that full 10 percent on hand. If you're experiencing cash flow pressure, it's a sign you may be underfunded—and that’s where a 5-year bank term loan can help you recapitalize and stabilize the business
The Wrong Kind of Debt Will Break You
Using merchant cash advances or maxing out credit cards to float payroll or pay suppliers might seem like a quick fix. But it’s a slippery slope. I’ve seen fast-growing businesses collapse in less than a year from this pattern.
Warning Signs Your Business Is at Risk:
Constant stress
Inconsistent cash flow
Sleepless nights
Pyramiding debt
Payroll panic
What’s the Real Solution?
You don’t need a band-aid. You need a clear financial strategy.
That starts with identifying the root causes of your cash flow issues—and building a plan based on where you are and where you want to go.
Want Clarity on Your Numbers?
If this hits close to home, it might be time to step back and take a hard look at your financial picture.
Start with the Contractors Financial Blueprint Assessment—a quick and powerful tool designed to help you:
Identify where cash is leaking
Evaluate your current debt strategy
Uncover hidden risks in your financial setup
Build a plan to grow with confidence
It takes just 90 seconds to complete—and the insights can be a game changer.
[Take the Assessment Now → LINK]
Where do you stand? Let’s find out—then fix it.
Patrick
Patrick Shurney, MBA
Founder, 3P Consulting
📞 443.539.6276
🌐 www.3pcllc.com
Helping Contractors Get Their Finances Sorted
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About Me:
As a veteran in financial coaching with over 30 years of corporate banking experience, my mission is to empower Trade Contractors like you to become numbers confident, optimize cash flow, leverage debt, and pay yourself competitively.
Ready for More?
Here’s how I can help you:
1. Profit Blueprint Program: Master your business numbers in just 30 days, uncovering hidden profits of $25K-$75K+ over the next 3-12 months.
2. Loan Consulting: Need the best rates and terms on your next loan? With 30+ years of banking experience, I’ll make sure you get a deal that works for you.
Ready to take your financial strategy to the next level? Let’s connect and make sure you’re running a thriving business while paying yourself what you’re worth.
