Clayridge Lending explains who pays for materials on a subcontract for trade firms in Enid, OK: furnish-and-install versus labor-only work, how materials are charged, why cash flow in construction runs tight, and how plumbing, electrical and HVAC subcontractors fund the gap. Garfield County, OK figures come from the Census Bureau.
Who buys the materials depends on the subcontract
On a furnish-and-install subcontract, such as one for plumbing, electrical or HVAC work, the subcontractor buys the pipe, wire, fixtures or equipment and includes them in its price. On a labor-only subcontract, the general contractor or owner supplies materials and the subcontractor provides the crew. Some jobs mix the two, with owner-supplied fixtures and subcontractor-supplied rough-in materials. The subcontract says which; read it before pricing.
How much do contractors charge for materials?
There is no standard local markup, and none is published for this area. A contractor may price materials at cost plus a markup that covers ordering, handling, storage, waste and the cost of carrying the money until they are paid. That last part can be underpriced: a subcontractor who pays the supply house in 30 days and is paid by the general contractor in 60 is financing the job for a month or more.
Cash flow in construction, defined plainly
Cash flow means when dollars move in and out of the account, which is a different thing from profit. A profitable job can still drain cash if materials and wages go out in weeks one to six and the first payment arrives in week eight. Retainage, held back until the job closes, stretches it further. Funding for contractors and builders explains retainage in more detail.
Five habits that ease cash flow in a construction business
- Bill materials stored on site when the contract allows it
- Ask for a mobilization or deposit payment on large material orders
- Negotiate supply-house terms that match the general contractor's pay cycle
- Submit pay applications on the first allowed day
- Use a revolving line for materials instead of draining the payroll account
A business line of credit drawn for each job's materials and repaid from that job's payments keeps one job's timing from starving the next.
Illustrative example: a rough-in subcontract
Illustrative arithmetic only. An HVAC subcontractor takes a $64,000 furnish-and-install job: $27,000 of equipment and ductwork and $21,000 of labor, with the rest as margin. The supply house wants payment in 30 days; the general contractor pays pay applications in about 45 days and holds back part of each until completion. For roughly two months the subcontractor carries most of the $48,000 in costs. That is the gap working capital or a credit line is meant for.
Supply-house accounts and joint checks
A supply house may extend credit to established trade firms and expect payment on fixed terms. On larger jobs, a supplier may ask the general contractor to pay by joint check, made out to both the subcontractor and the supplier, so the supplier is paid directly. That protects the supplier but can slow the subcontractor's own cash. Ask how materials will be paid before the job starts.
Garfield County, OK trade figures
Garfield County, OK had 126 construction employer establishments in 2023, including 28 plumbing, heating and AC contractors and 21 electrical contractors (U.S. Census Bureau, County Business Patterns 2023). Separately, 511 construction businesses had no payroll in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024). Funding for plumbing and HVAC contractors covers vans and stock; county figures are on Clayridge's Enid, OK numbers page.
By Clayridge Lending · Updated
