Retainage

Definition

Money a general contractor holds back from every invoice until a job is finished.

Why It Matters

On commercial work it commonly runs a tenth of the contract and sits unpaid for months after the electrician has left the site, which makes it working capital the buyer funds and not revenue the buyer collects. A book heavy in general-contractor work therefore needs more cash behind it than the same revenue in service calls. That tenth is a market habit and not a right. Several states now cap private retainage by statute, New York at five percent since late 2023, with release due thirty days after final approval and interest running on a late one. Public work is capped in more states still. So the number in the contract may be unenforceable and the release date may already have passed. Ask for retainage receivable by job and by age, because the oldest balances are the ones somebody has stopped chasing.