The quicker you substitute, the quicker your capital earns interest income. Every day your money sits frozen in withheld retainage is a day it produces nothing. That capital is real and it is yours, but while it stays locked up as retainage it doesn’t allow you to utilize it advantageously. The single most powerful reason to act quickly is simple: the sooner you replace withheld retainage with high grade securities, the sooner that capital starts generating yield. Every day of delay is earnings you cannot get back.
A dollar available today is worth more than a dollar received later, because today's dollar can be put to work immediately and allowed to compound. Retainage flips that principle against you: the money is already earned, yet it sits idle for the life of the project, while its real value quietly erodes to inflation. Substituting securities puts that capital back on the clock. Time is the one input in the equation you can never recover, so the contractor who substitutes on day one captures the full value of their capital, while the contractor who waits simply leaves money on the table.
At Double Diamond, we understand the importance of timing and earning our clients the best yield. We’ve spent over 30 years helping public sector contractors. Call us at 877 420 2852, or click here to learn more.
