Invoice financing
Advance against a receivable rather than waiting out the thirty-five days — or, on an exempt oilfield job, waiting out whatever the contract allows.
Invoice financing Texas · Prompt Payment Act, ch. 28
Business financing in Texas
Texas gives a private owner thirty-five days to pay a contractor, and gives the contractor seven days to pay everyone below him. Then it exempts an entire industry from the whole arrangement. Whether that clock protects you depends on what you were building.
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The exemption most Texas contractors have never read
If the job was oil, gas, or mineral development, Texas prompt payment does not apply at all.
Property Code § 28.010 lifts the entire chapter off "any agreement to explore, produce, or develop oil, natural gas … or other mineral substances." Not a longer deadline — no deadline. An oilfield services company waiting on a pad-site invoice has no statutory clock, no statutory interest, and no statutory leverage. Whatever the contract says is the whole of the law, which is exactly why oilfield receivables are financed differently from commercial ones.
- Residential is the slower clockThirty-five days for commercial, up to sixty-one for a single-family home. A residential builder carrying trades on a fourteen-day pay cycle is financing two full months of labour before the first cheque is contractually late.
- Oilfield receivables are contract-onlyWith § 28.010 removing the statute, an oilfield invoice is worth exactly what the master service agreement says and no more. Financing against it is priced accordingly — the factor is underwriting the operator's willingness to pay, not a statutory duty.
- Miss the fifteenth and you have missed the monthTexas lien deadlines land on the fifteenth day of a named month rather than counting days from an event. It is easy to be two weeks early on the paperwork and still a month late on the filing.
The Texas payment clock
Thirty-five days, seven days, and one and a half percent a month.
These are the private-work numbers from Property Code chapter 28. Public work runs on a separate statute with different figures, and both are set out below.
How these rules change invoice factoring for contractors in Texas, Virginia, and Georgia
- Step 01
An owner pays a contractor by the 35th day
Section 28.002(a) makes payment due no later than the thirty-fifth day after the owner receives a written payment request. On a single-family residence the owner may take until the sixty-first day under § 28.006(b) — nearly twice as long, and it catches residential builders out constantly.
- Step 02
The contractor has seven days to pass it down
Section 28.002(b) requires the contractor to pay each subcontractor no later than the seventh day after receiving the owner's payment. The clock restarts at each tier, so money owed to a second-tier sub is running on its own seven days once the tier above is paid.
- Step 03
Late money accrues 1.5% each month
Under § 28.004(b), an unpaid amount begins accruing interest at one and one-half percent each month. It is not a penalty a court has to be persuaded to award; it attaches to the overdue balance.
- Step 04
Public work: overdue on the 31st day
Government Code § 2251.021(a) makes a governmental entity's payment overdue on the thirty-first day. The vendor then has ten days to pay its subcontractors under § 2251.022, and interest under § 2251.025(b) runs at one percent plus the Wall Street Journal prime rate.
- Step 05
Retainage: 10%, held 30 days past completion
Property Code § 53.101(a) has the owner reserve ten percent of the contract price during the work and for thirty days after completion. On a $400,000 contract that is $40,000 you have already earned and cannot touch.
- Step 06
The lien deadline is a date, not a duration
For an original contractor on non-residential work, § 53.052(a)(1) sets the affidavit deadline at the fifteenth day of the fourth month after the month the work was last performed. Pre-lien notice under § 53.056(a-1) is due the fifteenth day of the third month, and a retainage claim under § 53.057(a-1) has its own thirty-day notice.
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What Texas contractors actually use.
Match the instrument to the gap. A thirty-five-day statutory clock and a ninety-day real-world one are different problems.
Working capital
A lump sum for a known, dated gap: mobilising to a pad site, a material order, payroll before a progress draw lands.
Working capitalLine of credit
A revolving cushion for lumpy cash flow, drawn only when a retainage hold or a slow month actually bites.
Lines of creditDeclined by a bank
A bank reads two years of tax returns. An alternative lender reads the deposits and the receivable. Different question, sometimes a different answer.
Bank declined? Lender fit
What a funding partner looks at in Texas.
None of this is a credit decision. It is what tends to move a file from maybe to yes.
Check fit nowWho owes the money
On invoice financing the underwriting is mostly about your customer, not you. A general contractor on a funded commercial project reads very differently from an operator on an exempt oilfield job.
Deposits, not just tax returns
Consistent bank deposits over the last several months carry more weight with an alternative lender than a filed return that describes last year.
How much retainage you are carrying
Ten percent held across several concurrent jobs is a real balance sheet item. Naming it, with the contracts behind it, is better than leaving a lender to guess.
Texas questions
What contractors ask before they apply.
Direct answers, with the section number so you can check them.
How long does an owner have to pay me in Texas?
Thirty-five days from the owner's receipt of a written payment request, under Property Code § 28.002(a). On a single-family residence the owner may take until the sixty-first day (§ 28.006(b)). Once you are paid, you have seven days to pay your subcontractors under § 28.002(b). Overdue amounts accrue interest at one and one-half percent per month (§ 28.004(b)).
Does Texas prompt payment cover oilfield work?
No. Property Code § 28.010 exempts any agreement to explore, produce, or develop oil, natural gas, or other mineral substances from the whole chapter. There is no statutory payment deadline and no statutory interest on that work — the contract governs entirely. It is the single largest carve-out in the Texas prompt-payment scheme, and it is why oilfield receivables are financed on different terms.
When is my Texas lien deadline?
For an original contractor on non-residential work, the lien affidavit is due by the fifteenth day of the fourth month after the month in which you last performed work (§ 53.052(a)(1)). Pre-lien notice is due by the fifteenth day of the third month (§ 53.056(a-1)), and a retainage claim carries a separate thirty-day notice (§ 53.057(a-1)). Residential deadlines are one month shorter. These are calendar dates, not day counts.
How much retainage can be held in Texas?
Ten percent of the contract price, reserved during the work and for thirty days after the work is completed, under Property Code § 53.101(a). That money is earned but unavailable, which is why contractors carrying several jobs at once often finance against it rather than wait.
Is Crewline a lender?
No. Crewline is a referral and matching service. Applications are passed to a third-party funding partner who makes the credit decision on their own criteria. You are never charged a fee to apply, nothing here is a commitment to lend, and no approval is guaranteed.
Texas
Thirty-five days is the statute. What is your actual gap?
Tell us what you are building, who owes you, and when the money is supposed to land. It takes a few minutes, costs nothing, and does not touch your credit file.
- Owner pays contractor
- 35 days
- Contractor pays subs
- 7 days
- Retainage
- 10%
- Oilfield work
- Exempt
Crewline is a referral and matching service, not a lender. We do not make credit decisions or guarantee approval. Financing is provided by third-party lenders subject to their own terms and criteria.