Can my trades business get a loan to cover payroll?
Skilled trades workers are among the hardest employees to replace in any industry. According to BLS data, median wages run $50,000 to $63,000 per year depending on the trade.
| Trade | Median Annual Salary |
|---|---|
| Electrician | $62,350 |
| Plumber / Pipefitter | $62,970 |
| HVAC Technician | $59,810 |
| Carpenter | $56,350 |
| Roofer | $50,970 |
Source: BLS Occupational Employment and Wage Statistics, May 2024
An 8-employee electrical shop at $55,000 average salary runs about $36,667 per month in base wages. Add the payroll burden (FICA, unemployment taxes, workers comp at 5 to 7% for electrical, health insurance) at 30 to 45%, and total monthly labor cost hits $48,000 to $53,000.
What one missed payroll actually costs:
| Consequence | Cost |
|---|---|
| Replacing a $60K tradesperson | $60,000–$120,000 (50–200% of salary) |
| Industry-wide annual turnover cost | $5.3 billion |
| FLSA penalties (federal) | Back wages + equal liquidated damages |
| California penalty | $100/employee first offense; $200 + 25% repeat |
| New York penalty | 100% liquidated damages + 16% annual interest |
| Job delays from lost crew | Contract penalties + reputation damage |
Sources: DOL, ABC, state labor departments
Construction turnover runs 68.2% annually, with skilled trades even higher at 73.1%. A contractor who loses a journeyman electrician over a single missed payroll may not find a replacement for months. The industry needs 439,000 additional workers in 2025, projected to hit 499,000 in 2026. 94% of firms report difficulty filling positions. 41% of the current workforce will retire by 2031. Every skilled worker you have is functionally irreplaceable right now.
Why payroll gaps happen in trades (it's usually not mismanagement):
- GC payment delays. General contractors pay subs on net-30, net-60, or net-90 terms. Work is done, but money hasn't arrived.
- Weather stops. 45% of construction projects are affected by weather. 60% face weather-related delays. Work stops, payroll doesn't.
- Change order disputes. Work completed but payment held pending approval.
- Retainage. 5 to 10% of contract value held until project completion, which can be months or years away.
- Seasonal revenue swings. HVAC companies can see 50 to 75% revenue drops in shoulder months.
These are structural problems in the trades business model. They happen to well-run operations.
The math on payroll funding:
A same-day advance on $15,000 at a 1.25 factor rate costs $3,750 in fees. Losing two skilled workers over missed pay costs $120,000 to $240,000 in replacement costs alone, plus the jobs you can't complete without them. The cost of covering the gap is a fraction of the cost of not covering it.
How QuicLoans helps:
We're a broker with access to multiple lenders. When payroll is due and you're short, we find the fastest option that fits. If your business is depositing $10K+ monthly, most approvals come back same day. See your trades funding options or apply now.
Looking for more trades funding information? Explore all trades business loans →