Retainage Impact Calculator | Full Send Funding

You need to enable JavaScript to run this app.Retainage Impact CalculatorRetainage is quoted as a percentage of the contract, which is why it sounds small. Measured against the profit on that contract — and against the whole book you are running — it is a much larger number. Enter your own contract terms. Nothing on this page is an offer or a rate.Free to use, with no sign-up and no email address. The figures you enter stay in your browser — they are not sent anywhere and they are not stored.The methodology, in fullThe formulas

Retainage on a job = contract value × retention rate — The article’s opening example: a $1,000,000 job at 10% is $100,000 held.

Retainage multiple = retainage on the job ÷ that job’s net profit = retention rate ÷ net margin — Contract value appears in both halves and cancels, so the multiple is the same on a $200,000 job as on a $2,000,000 one. Rounded to one decimal, half up, which is how the article’s chart is published.

Retainage permanently outstanding = annual revenue × retention rate × release lag in years — Bolded in the article and the caption of its steady-state table. This tool takes the lag in months and divides by 12 — the article’s own worked year is 11 ÷ 12.

Annual net profit = annual revenue × net margin, and the multiple of a year’s profit = steady state ÷ annual net profit — From the article’s worked year: $550,000 held against $240,000 earned, which it reads as “larger than two full years of the company’s net profit”.

Additional cash on growth = steady state at the new revenue − steady state today — The same worked year at $9,000,000: $825,000 outstanding, $275,000 more cash required, for a company that is more profitable than it was.

Two different sums, and why they are not the sameThe snapshot across the jobs running today and the steady-state figure answer different questions, and adding one to the other, or treating either as the other, produces a number that means nothing. A contract’s value is spread across its duration: four concurrent $1,000,000 jobs each running eighteen months is roughly $2.7 million of annual revenue, not $4 million. The snapshot tells you what is being withheld from the work in progress right now. The steady state tells you what will be outstanding on every balance sheet date for as long as you keep starting and finishing work at this rate, and it is the one that grows in exact proportion to revenue.The worked year this reproducesThe article works through a mechanical subcontractor billing $6 million a year at a 4% net margin, with 10% retention and an eleven-month release lag.The $1,000,000 job is the article’s own per-job example, carried here at the same 10% retention and the same 4% margin. The worked year does not state a job count or a payroll figure, so the button leaves both blank rather than putting a number on this page that its source does not support.

Annual revenue — $6,000,000

Net margin — 4%

Retention rate — 10%

Average release lag — 11 months

Annual net profit — $240,000

Permanently outstanding — $550,000

Multiple of a year’s profit — 2.29×

At $9,000,000 of revenue — $825,000

Additional cash required — $275,000

One $1,000,000 job at the same terms — $100,000 held

Profit on that job — $40,000

Retainage multiple — 2.5×

Where these numbers come fromThey are derived, not surveyed. Every figure this tool prints is computed from what you typed, using the formulas above and nothing else. The retention percentages, release lags and margins in the article are typical ranges from construction practice and from our own underwriting of contractors — they are not measured industry averages and no such average is claimed here. The legal framework the article describes is stated from primary texts, and state law varies enough that a contractor working in three states is working under three regimes.