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Cash FlowGlossary Term

Bridging Power

A subcontractor's ability to fund operations while waiting on client payments. It covers payroll, fuel, and equipment costs between invoice and payment. Strong bridging power prevents work stoppages during slow pay cycles.

Related Terms

Rule 144a

Cash Flow

A U.S. securities regulation allowing large private companies to raise capital without a public stock listing. For subcontractors, it signals a major client may have access to significant private funding. This can affect contract stability and payment capacity on large projects.

Entitlement Risk

Cash Flow

The risk that a subcontractor cannot fully recover costs or markup owed under contract due to unclear scope, missing documentation, or disputed change orders. It often arises when work is performed without written authorisation. Strong record-keeping and proactive change management are the primary defences.

Rescheduling

Cash Flow

Rescheduling occurs when a client moves a confirmed job to a new date, disrupting crew and equipment plans. Subcontractors should have rescheduling clauses in contracts to recover standby costs. Repeated rescheduling without compensation can seriously damage a small operator's cash flow.

Adjusted Ebitda (earnings Before Interest, Taxes, Depreciation and Amortisation)

Cash Flow

A profitability measure that strips out non-cash costs and one-time charges, showing true operational earnings. For subcontractors, it reveals how much cash your field operations actually generate. Clients and lenders use it to assess your financial health before awarding contracts or extending credit.

Principal Forgiveness

Cash Flow

When a lender cancels part of the original loan balance owed by a subcontractor or field service company. This reduces total debt obligations, improving cash flow for ongoing operations. It differs from interest relief, as it directly lowers the core amount borrowed.

Rack and Carriage

Cash Flow

A pricing structure where subcontractors charge a marked-up "rack" rate for materials, plus a separate fee for delivery or handling. It allows field service companies to recover supply chain costs beyond base labour rates.

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