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Cash FlowGlossary Term

Buyout

A lump-sum payment made to a subcontractor to settle or terminate a contract early. It compensates for remaining work, mobilisation costs, or lost profit margins. Subcontractors should verify buyout terms are clearly written into their agreements before signing.

Related Terms

Spot Price

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The current market rate for materials, fuel, or equipment rentals purchased for immediate delivery. Spot prices fluctuate daily, directly affecting your job cost estimates and margins. Locking in rates early can protect subcontractors from sudden price spikes mid-project.

Mechanic's Lien

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A legal claim registered against a property or project when a subcontractor hasn't been paid for labour or materials. It prevents the owner from selling or refinancing until the debt is resolved. Filing deadlines are strict, so act quickly if payment is overdue.

Differential

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A pay premium added to a base rate for working in hazardous, remote, or demanding conditions. Subcontractors should account for applicable differentials when pricing bids and setting crew rates.

Drinking Water State Revolving Fund (dwsrf)

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A U.S. federal loan programme funding municipal drinking water infrastructure upgrades. Subcontractors often access steady pipeline and treatment plant work through DWSRF-backed projects. Expect strict regulatory compliance requirements and public-sector billing cycles on these contracts.

Bridging Power

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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.

Principal Forgiveness

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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.

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