Retainage is not just money held back. It is your working capital trapped on the balance sheet. A subcontractor completes $100,000 worth of work. But the GC withholds 10% retainage. So the subcontractor receives only $90,000 now. The remaining $10,000 may be released only after: Substantial completion. Punch list work. Final inspection. Lien waivers. Closeout documents. Owner or lender approval. Meanwhile, the subcontractor still has to pay: Payroll. Materials. Suppliers. Fuel. Equipment. Insurance. Office expenses. That is the painful part. Your expenses are immediate. Your retainage cash is delayed. So the business may show profit on the Profit & Loss statement, while the bank account still feels empty.