Retainage
Last updated: August 2026
Retainage is the portion of each construction progress payment — typically 5–10% — that the payer withholds until milestones or the whole project complete. It protects the owner; it also parks the supply chain's margin for months.
What it does downstream
Retainage travels down the chain: the owner holds it from the contractor, the contractor holds it from subs, and everyone's suppliers wait on the release. On a long project, the last 5–10% of revenue can arrive a year after the work.
Underwriting it instead of ignoring it
Generic credit models treat retainage as noise. Yellowpay prices it into the term — one reason terms can go to NET-120 where horizontal providers stop at 90.
Related terms
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