Not every general contractor treats subcontractor payments with the same urgency. Learning to identify slow payers before you commit to a project can save you months of cash flow stress and thousands of dollars in collection costs.
Red Flag 1: No Clear Payment Terms in the Contract
If the contract is vague about payment terms, timelines, or dispute resolution, that's a warning sign. Professional GCs include specific net payment terms (Net-15, Net-30), clear submission requirements, and defined timelines for payment processing. Vague language like "payment upon completion" leaves too much room for interpretation and delay.
Red Flag 2: They Push Back on Preliminary Notices
In states that require preliminary notices, a GC who discourages you from sending them may be planning to use the lack of notice as leverage if payment disputes arise. A legitimate GC understands that preliminary notices are standard industry practice and has no reason to discourage them.
Red Flag 3: Poor Reputation Among Other Subs
Talk to other subcontractors who have worked with the GC. The construction industry is smaller than you think, and word travels fast about who pays well and who doesn't. Online platforms that aggregate payment ratings and reviews from fellow subcontractors make this research easier than ever.
Red Flag 4: History of Disputes and Liens
Search for mechanics liens filed against the GC's projects. Multiple lien filings suggest a pattern of non-payment. Court records and contractor licensing boards can also reveal a history of disputes and complaints.
Red Flag 5: They Want You to Start Before the Contract is Signed
Starting work without a signed contract removes your strongest legal protections. A GC who pressures you to begin immediately "while the paperwork gets sorted out" may be testing how easy you are to take advantage of. Always get the contract signed first.
Red Flag 6: Long Payment History Average
Use GC scoring and rating tools to check the contractor's average days to payment. If they consistently pay beyond 60 days, factor that into your bid price and cash flow planning. You might still take the job, but go in with your eyes open.
Red Flag 7: Frequent Change Orders Without Documentation
GCs who frequently request extra work verbally without written change orders are setting up future disputes. When the invoice comes, they may dispute charges that weren't formally documented. Insist on written change orders before performing any work outside the original scope.
How to Protect Yourself
Research every GC before bidding. Use industry databases, payment scoring platforms, and your network to build a complete picture of who you're considering working with. Negotiate strong contract terms including progress payments, clear payment timelines, and dispute resolution procedures.
Set up automated payment tracking from day one so you know exactly where every invoice stands. And always file your preliminary notices and track your lien deadlines, even when you don't expect problems. The projects where everything seems fine are sometimes the ones where problems appear unexpectedly.
When to Walk Away
Sometimes the best decision is to pass on a project. If the GC has a poor payment history, refuses reasonable contract terms, or gives you an uneasy feeling, trust your instincts. One reliable project with a trustworthy GC is worth more than three jobs where you're constantly chasing payment.