How to set up progress payments

Progress payments, also called draws, split the price into payments that fall due as stages of the work are finished. Set up well, neither side is ever far ahead of the other: you aren't working for free, and the client isn't paying for work that isn't there.

Two threads show both sides of it. One contractor asked how others structure draws on small jobs, because a deposit and a final payment left him carrying the whole middle of the job. Another admitted it felt awkward to ask for progress payments at all. A lot of people said the same.

A structure that works for most remodels

A deposit at signing, small, and within your state's limit. Some states cap it; California, for example, limits home improvement down payments to $1,000 or 10% of the price, whichever is less (CSLB).
A draw for each stage you can point at: demo done, rough-in passed, drywall up, tile set, finish.
Each draw due when the stage is signed off. A date-based draw is due whether the work is there or not, which is how clients end up feeling they're paying ahead.
A small final payment, due when the last punch list is closed.

Size each draw to the work in that stage, plus the materials you've bought for it. If rough-in costs you a third of the job, its draw should be about a third.

Making the ask easier

It feels awkward because it feels personal: you, asking someone you like for money. It's easier when the contract does the asking. "Rough-in passed inspection today, so draw 2 is due" is a statement of fact the client agreed to months ago. Send it the same day, every time, the same way. Once it's routine, nobody reads anything into it.

When the client is tight on money

One contractor's client wanted the work but said money was tight. Smaller stages with smaller draws can help, or dated instalments if you're comfortable carrying some risk. Either way, write the schedule down before you start. If the money runs out partway through, see when a client runs out of money mid-job.

Draws that ask for themselves

In Everkept you set the stages and the draws as you write the job. When a stage is done you mark it with photos, your client signs it off from the email, and the draw for it is due. Both of you see what's been paid and what's left, all the time.

Start a job

This is general information, not legal advice. States differ on what a home improvement contract and its changes must contain. Check with your state’s contractor licensing board or an attorney.