Dive summary:

• The recession changed many things, often not for the better. One new situation it has created is that contractors have to be careful about whether clients are going to be able to fulfill their ends of the bargain – payments.
• Contractors can take steps to protect themselves, two consultants say, including asking for carefully drawn letters of credit, which are easier to implement – if worded properly – than surety bonds.
• Contractors also can ask for money up front or for a more-frequent draw, say every two weeks rather than monthly.

From the article:

While the construction industry has well-developed tools, such as retainage and surety bonds, to protect the owners' interests, general contractors should look to concepts that are common in the business sector to ensure the owner's performance. ...