Industry · construction
Underwriting MCAs in Construction & infrastructure
Construction and infrastructure businesses settle in project-based milestone draws and end-of-period retainage releases, producing a lumpy deposit pattern that requires industry-aware underwriting.
Key takeaways
- Milestone draws cause large, irregular deposits.
- Retainage releases at period boundaries are normal — not window dressing.
- Subcontractor payment chains can look like graph cycles.
- Single-project concentration is normal for smaller operators.
- Symmetric pairs with raw-material suppliers are not necessarily fraud.
How underwriting differs
A construction merchant may show three large deposits in a month and nothing the next. The lumpiness is the business reality, not a manipulation signature.
Retainage — the portion of a contract held back until project completion — releases at period ends as a matter of contract, not gaming. Window-dressing detection needs adjustment.
Subcontractor payment chains create bidirectional flows that resemble graph cycles. Industry tuning prevents false-positive cycle flags.
Common deposit signatures
| Type | Pattern |
|---|---|
| Milestone draws | Large deposits tied to project completion phases. Often described with the project name or "DRAW". |
| Progress payments | Periodic draws against a project completion schedule. |
| Retainage releases | End-of-project deposits releasing held-back funds. Often coincide with statement-period boundaries. |
| Subcontractor flows | Outflows to subs and inflows from contract parties, sometimes bidirectional with the same counterparty. |
Common fraud patterns to watch
Kiting between project and operating accounts
Self-transfers from project-specific accounts into the operating account inflate apparent revenue.
Pass-through arrangements with subcontractors
Cash flows through a sub and back, creating apparent revenue without real economic activity.
Phantom milestones
Deposits described as project draws without corresponding contract documentation.
What underwriters watch for
- Are milestone deposits supported by contract documentation?
- Do retainage releases align with stated project timelines?
- Are subcontractor flows net-positive over the statement period?
- Is the project mix diversified or single-project dependent?
How Vyaso handles construction & infrastructure
Vyaso recognizes construction's lumpy cadence and retainage pattern. Window dressing detection adjusts for legitimate end-of-project releases. Counterparty concentration thresholds acknowledge that single-project dominance is normal for smaller operators.