What CSLB is
The Contractors State License Board (CSLB) describes its mission as protecting California consumers by licensing and regulating the state's construction industry. It was established in 1929 and says it licenses about 285,000 contractors in 45 different classifications. The classifications include General Engineering (A), General Building (B), Residential Remodeling (B-2) and a long list of specialty C classifications, among them C-46 for solar. CSLB's home page also notes an online application for sole owners of a contracting business.
Which license you need depends on the work. Confirm the classification and requirements with CSLB before you bid. This page is general information, not advice on licensing.
The down-payment limit and what it does to cash
CSLB's notice on rebuilding after declared disasters says contractors cannot ask for or accept a down payment of more than $1,000 or 10 percent of the total contract price, whichever is less, and that other payments must be clearly listed in the contract and based on the actual value of work completed or on materials delivered. The notice says these rules apply to home improvement projects, including residential solar installations and ADUs, and that for disaster-related work contractors must use a fixed-price contract.
Whatever your own work, the lesson holds: on consumer jobs the customer's deposit covers little of the cost, so you finance the early weeks of a job yourself.
A job's cash curve, for illustration
These are made-up round numbers to show the shape of the cycle. They are not our terms or typical results, and they describe cash flow in a trade generally; they are not a promise of funding for any category of work, including residential remodeling.
| Stage | Cost to you | Payment received |
|---|---|---|
| Contract signed | Estimating, permits | Deposit within the legal limit |
| Materials ordered and delivered | Materials bill | Progress payment tied to materials delivered, if the contract provides one |
| Work in progress | Crew payroll weekly | Progress payments for completed work |
| Punch list and inspection | Rework, small items | Final payment after completion |
The gap is between the materials bill and the next payment. A contractor with several jobs at once multiplies the gap.
Three habits that protect cash
- Tie payments to milestones. A schedule that follows delivered materials and completed work keeps your exposure small.
- Stagger starts. Starting every job in the same week stacks the materials bills.
- Keep a reserve for rework. A failed inspection costs time, which is cash.
Where funding fits
Working capital from $25,000 to $5,000,000 can bridge the weeks between paying for materials and being paid for the work. Funding can arrive in as little as 24 hours, FICO scores of 500 and up are considered, and the file centres on about three months of bank statements, with no tax returns required. The credit pull is soft and sole proprietors can apply, which includes many solo contractors. Each file is reviewed individually. When you are ready, the application takes about five minutes.