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Do you need new equipment, tools or materials for your next job? We have the construction financing tools you need to grow. Compare construction business loans with Upwise.
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Construction Business Loans: How They Can Help You
Running a construction or contracting business comes with many challenges unique to the industry. For example, bad weather or delayed permits can double the time it takes to complete a project. The high level of employee turnover also makes finding a high-quality team difficult. It might seem overwhelming to manage cash flow through these unexpected ups and downs. That’s where business loans for contractors and construction companies can help. If you are a small business owner with physical location and you need to build a new office or remodel an existing one, then a construction loan can be used to finance your construction project. Or if you need a business loan for construction equipment, see our financing and leasing options.
What can a Construction Business Loan be used for?
Compete for Bigger Jobs
- Put yourself ahead of the competition to bid on larger projects with a construction business loan
- Have the extra funds to feel secure when taking on bigger jobs, upgrading equipment or hiring workers
Hire More Workers
- With construction business financing, you can address the need for hiring more employees
- Finance education and training costs for those employees with your construction loan for your business
Marketing & Advertising
- Use a construction loan to advertise and grow your customer base or expand to a new region
- Build or optimize your website, add new signage, or place a radio or newspaper ad to generate new customers
Manage Cash Flow
- Maintain your capital cash flow to manage expenses during the slow season
- Utilize construction financing loans to fund your next project, while waiting to get paid from a previous job
Purchase Equipment & Materials
- You can use a construction loan to buy new equipment or materials that will be used on the construction job
- Use equipment leasing and financing to purchase office equipment such as, CAD software or heavy equipment
Make Payroll
- Payroll needs to be met even if you have cash flow shortages or unexpected receivable issues
- Construction financing can be taken advantage of to ensure you can always make payroll and as a result keep your workers happy
6 Best Business Loan Options for Construction Contractors
Working Capital for Construction Companies
The construction industry has unique challenges when it comes to managing cash flow and working capital. Undoubtedly, margins are usually thin and it can take months for the construction company to get paid. For instance, you can use a working capital construction loan to bridge the gap between the time you receive payment and your next job. Working capital loans provide a fixed amount of money, with a fixed cost which are paid back over a term of 3-18 months.
Equipment Financing for Construction Companies
An equipment financing loan can be a great option for a construction loan, especially if you are looking to lease or finance a piece of equipment. Many construction companies utilize heavy equipment such as yellow iron and machinery to take on large jobs. Therefore, a new piece of equipment can have a huge impact on growth of the business. A business loan for construction equipment is usually structured as a lease to purchase or a fixed-term loan.
Lines of Credit for Construction Companies
Business credit lines have the flexibility that other loans do not. Similar to a credit card in the sense that it’s a revolving line of credit which allows you to draw funds as you need it. Also, you only pay interest on the funds that you draw. Additionally, early repayment discounts work great for construction companies because once you’ve finished using the money, you can pay it back and save drastically on interest. So if you only needed the funds to cover a certain expense for short term, a line of credit works great.
Term Loan for Construction Companies
A business term loan is another great option for construction industry companies. Term loans are meant for established contractors. In other words, contractors that are showing a profit on their most recent tax returns, have been in business at least 2 years and have a good credit score. The proceeds from this type of construction loan can be used for a multitude of business purposes such as marketing, expansion or taking on new jobs.
SBA Loans for Construction Companies
A Small Business Administration loan or SBA loan is a loan guaranteed by the Small Business Administration. On the contrary, the SBA is not the lender, but they do guarantee the loan through an approved SBA lender. An SBA loan is a highly desirable financing product, however the process is long with many paperwork requirements and high credit standards. See how an SBA loan for a construction business can help you.
Real Estate Financing for Construction Companies
A real estate financing loan can also be a great option for a construction loan, especially if you have collateral to secure against the loan. Many construction companies we come across have equipment, land, buildings or purchase orders which can be used as an asset to secure a construction business loan. For instance, contractors will use an asset for more favorable terms, resulting in a higher approval and lower interest rate.
How to Apply for a Construction Business Loan
Construction Funding Solutions
to Boost your Success
Why Upwise for Construction
- We Know Construction Businesses
- Trusted by Companies Like Yours
- Personalized Experience
- Fast & East Application Process
- Loan Specialists Who Are Wiser & Care
- Transparent Terms & Automatic Payments
Types of Construction Companies We Serve
We offer construction loans to a wide range of industries and companies. You deserve options. Therefore, Upwise provides construction working capital, lines of credit for construction companies, commercial loans, business loans for construction equipment, construction business term loans, real estate financing and other construction business financing solutions for all your needs. Below are some of the construction companies & industries we’ve worked with:
- General Contractors
- Electrical Contractors
- Plumbing Contractors
- HVAC Contractors
- Home Builders
- Sub-Contractors
- Remodeling & Home Improvements
- Masonry & Carpentry Contractors
- Residential & Commercial
- Construction Managers
- Demolition Contractors
- Metal Scrap
- Property Maintenance
- Manufacturers & Distributors
- Architect & Design Companies
- Real Estate Developers
- Package Builders
- Program Managers
Compare All Construction Business Loan Options
Max Loan Amount
$25K to $20MM
Profitability
Shown on Tax Returns
Loan Term
5 to 30 Years
Credit Score
620+
Interest Rate
7 % - 30 %
Time in Business
Greater than 2 Years
Speed
As Fast As 2 Days
Annual Revenue
Over $200K
Term Loan
A traditional business term loan is a lump sum of capital that you pay back with regular repayments at a fixed interest rate. The “term” in “term loan” comes from its set repayment term length, which will typically be one to five years long. Most business owners use the proceeds of term loans to finance a specific, one-off investment for their small business.
- Bi-Weekly & Monthly Payments
- Longer Payment Terms
- Lower Interest Rates
Loan Amount
$5K to $250K
Unsecured Line of Credit
Loan Amount
$100K to $10MM
Secured Line of Credit
Loan Term
6 Months to 2 Years
Credit Score
500+
Secured Line of Credit: 620+
Interest Rate
7 % - 25 %
Time in Business
Greater than 1 Year
Speed
As Fast As Same Day
Annual Revenue
$150K+
Business Line of Credit
A revolving business line of credit gives access to a pool of funds to draw from when a business owner needs capital. Unlike a traditional business loan, you have the flexibility to borrow up to a set amount, repaying only the amount you withdraw, plus interest.
- Weekly or Monthly Payments
- Only Pay Interest on the Funds you Draw
- Save on Interest by Paying Back Early
Max Loan Amount
100% of Equipment Value
History
Good Financial History
and Tradelines
Loan Term
1 to 8 Years
or Expected Life of Equipment
Credit Score
500+
Interest Rate
As Low As 4 %
Time in Business
6 Months +
Start Ups Encouraged to Apply
Speed
As Fast As 2 Days
Annual Revenue
100K+
Equipment Financing
Equipment financing helps you finance up to 100% of the new or used equipment you need for your business. A fast and easy way to finance the purchase of all types of equipment. With a secured loan against your equipment, you can take advantage of the equity in your existing equipment, or use newly-purchased equipment as collateral.
- Avoid large upfront costs for equipment purchased
- Equipment used as collateral
- Monthly Payments
Max Loan Amount
Up to 100% of Invoice Amount
Invoices
From Credible Clients
Repayment
When Customer Pays Invoice
Credit Score
Over 600+
Factor Rate
8 % - 30 %
Time in Business
Greater than 1 Year
Speed
As Fast As Same Day
Annual Revenue
150K+
Invoice Financing
Invoice financing is a type of asset-based financing that allows business owners to free up unpaid invoices. With invoice financing, you can get a fast advance of about 85% of the value of your invoices, with most of the other 15% paid to you later.
- No Need to Wait for Invoice from Customers
- Low Interest Rates
- Invoice is used as Collateral
Loan Amount
$5K to $5MM
History
Positive Payment History
Loan Term
3 Months to 2 Years
Credit Score
500+
Interest Rate
9.99 % - 24.99%
Time in Business
6 Months +
Speed
As Fast As Same Day
Annual Revenue
120K+
Short Term Loan
Short-term business loans are lump-sum loans that are designed to be paid back in less than 18 months. They can be a flexible financial tool, best used for financing short-term needs—including managing cash flow, dealing with unexpected needs for extra cash, bridging larger financing options, paying off expensive debt, or taking advantage of unforeseen business opportunities.
- Bad Credit Accepted
- Minimal Paperwork & Fast Funding
- Prepayment Discounts for Early Payoff
Funding Amount
$5K to $5MM
History
Positive Payment History
Time
3 to 18 Months
Credit Score
500+
Factor Rate
1.10 - 1.36
Time in Business
Greater than 3 Months
Speed
As Fast As Same Day
Annual Revenue
120K+
Working Capital
With this product, you are advanced cash in exchange for a percentage of your daily credit card and debit card sales, or your monthly revenue. Working Capital can be a quick and easy way to get a business cash advance with no need for collateral, even if you don’t have a good credit score.
- Minimal Paperwork, Easy Approval & Fast Funding
- Prepayment Discounts for Early Payoff
- Bad Credit Accepted
Loan Amount
$5K to $5MM
Loan Amount
$350K
SBA 7(a) Small & Express Loans
Loan Term
5 to 30 Years
Credit Score
650+
Interest Rate
Starting at 6.75 %
Time in Business
Greater than 2 Years
Speed
As Fast As 2 Weeks
Annual Revenue
Over $200K
SBA Loan
SBA loans are the government-backed loans your business needs. The U.S. Small Business Administration (SBA) is a federal agency designed solely to help small businesses get the funds they need. The SBA doesn’t actually lend you any cash, yet it establishes guidelines and guarantees portions of those loans by an approved SBA lender.
- Monthly Payments
- Longest Payment Terms
- Low Interest Rates
Max Loan Amount
$150K to $200MM
Collateral
Valued Over $150K
Loan Term
1 to 30 Years
Credit Score
620+
Interest Rate
6 % - 12 %
Time in Business
Greater than 3 Years
Speed
As Fast As 2 Weeks
Annual Revenue
Over 200K+
Real Estate Financing
An asset-based loan is secured by assets instead of emphasizing cash flow, which is typically real estate or whatever assets a business has on its balance sheet. Lender will use collateral which can be quickly and easily liquidated. Assets can also be accounts receivables, equipment, land, crop, purchase orders and inventory. Asset backed loans secured by collateral offered by Upwise are most often structured as term loans and revolving lines of credit.
- Interest Only & Monthly Payments
- Larger Loan Sizes
- Lower Interest Rates
Max Loan Amount
$100K to $10MM
Account Receivables
From Credible Clients
Loan Term
Based on When Customer Pays Account Receivable
Credit Score
Over 600+
Factor Rate
Under 18 %
Time in Business
Greater than 1 Year
Speed
As Fast As Same Day
Annual Revenue
200K+
Account Receivable Factoring
Accounts Receivable Financing, is a type of asset-based financing that allows business owners to free up unpaid receivables. With A/R financing, you’re advanced fast cash collateralized by approximately 85% of your account receivables, giving you an excellent way to put that money back into your business.
- No Need to Wait for A/R Payment from Customers
- Based on Credit of the Receivable's Business
- Account Receivable is used as Collateral
Construction Loans FAQ: Frequently Asked Questions
Can I qualify for a construction loan if I have bad credit?
Yes, even if you have a bad credit history, there are funding options available to you. Short term loans, working capital, equipment financing and invoice financing are great options for those with less than average FICO scores.
How do I apply for a construction loan?
You can apply for a business construction loan through Upwise Capital, we make the application process very simple for you. Simply visit our online application here or call us directly to apply over the phone at (646)837-5522.
The amount of paperwork required for your application will depend on the product you are interested in or what your business will qualify for.
Step 1: Choose the right product for your construction business
- The first step is choosing the best financing or loan option that most aligns with your business needs. Consider what you’re using the funds for. Are you covering a short-term or long-term cost? Are you financing equipment or factoring receivables? We can assist you with choosing the best product for your needs, just give us a quick call at 646-837-5522.
Step 2: Gather & Submit Your Documents
Secondly, here is a list of documents required for most construction loan types:
- Driver’s license
- Voided business check
- Bank statements from the past three months
- Invoice for equipment (for Equipment Financing)
- Credit card processing statements from the past three months (for Merchant Cash Advance)
- Accounts Receivable Aging Report (for Accounts Receivable Factoring)
- Accounts Receivable (for Accounts Receivable Factoring)
- Debt Schedule (for Accounts Receivable Factoring)
Step 3: Fill Out an Application
- Third, you can begin the application by filling out our online application or calling us directly.
Step 4: Speak to an Upwise representative
- Fourth step, once you’ve submit your application, an Upwise representative will reach out to learn more about your business and explain your available options. Here we will go inform you of the repayment structures, rates, terms, conditions, etc. This way, you won’t have to worry about any hidden fees during the closing or repayment process.
Step 5: Receive your Approval
- Last but not least, if and when you’re approved for funding, you will be presented with an offer and approval. If you agree to the terms and conditions, you will receive a funding contract.
How long will it take to receive my funds?
This will depend on the product you are applying for. We have issued construction loans within 24 hours, as fast as the same day. The faster you provide us with the necessary documents, the quicker we can move on our end to expedite the process for you.
Approximate time for each product
Funds from construction loans such as business term loans, lines of credit, working capital loans, equipment financing, merchant cash advance, account receivable factoring and revenue-based business loans should appear in your bank account within 1-3 business days. For SBA loans and real estate financing, it can take up to 2-5 weeks to receive funds.
What are the advantages of a business loan for construction companies?
Construction businesses grow by taking on increasingly complex and lucrative projects. Thanks to construction loans, you can say “yes” when your cash flow would otherwise force you to say “no.” In other words, you don’t have to let expenses pile up, long gaps between compensation, or delays in start dates prevent you from accepting critical opportunities.
Cash flow shortages can make it difficult to retain high quality employees and build loyalty. This is one of the biggest challenges of construction businesses. Construction loans ensure that you’re always able to pay your employees on time, even when projects get delayed. After all, a larger team allows you to take on larger projects.
Other Advantages
You don’t need entirely consistent cash flow, a substantial bank balance, or excellent personal credit to be approved. You can still get funded in a matter of days, even if the majority of your operating capital is spoken for.
For this reason, many contractors take out small business loans during the slow season so they can maintain funds to prepare for their busy season. In this case, we wouldn’t suggest a construction loan that requires you to make a large payment soon after you received the funding.
What are the disadvantages of a business loan for construction companies?
Although there are many advantages to getting a construction loan, many small business owners don’t want to get themselves into too much debt. As stated previously, receivables in the construction and contracting business can be inconsistent. With so many factors out of your control, it’s tough to predict when you may receive payment for work you’ve completed. Adding a loan payment to the mix might do more harm than good in some cases.
If your business credit or personal credit isn’t optimal, you may be ineligible for the best construction SBA programs. An SBA generally requires excellent credit because you’ll be receiving the best interest rate and loan terms up to 30 years. Some programs allow you to use real estate as collateral to help obtain the SBA loan.
Am I eligible to apply if i already have another loan?
Yes, even if you have another loan with a bank or lender, your business may still be eligible. As long as you have not defaulted, have a good payment history and underwriting determines that your business can afford to payback the loan, you can still qualify for a construction business loan.
is it hard to obtain a construction loan?
Importantly, this will depend on what type of construction business loan you are applying for. For example, an SBA loan is a lot harder to get approved for rather than an equipment financing loan. However, here at Upwise we offer a variety of loan options for you to choose from. Each type of construction loan has different qualifications so that you can find the best solution that works for you.
What's the best business construction loan? What are construction loan rates?
See above, we go over the 6 best business loans for construction companies and contractors:
- Working Capital for Construction Companies
- Equipment Financing for Construction Companies
- Real Estate Financing for Construction Companies
- Lines of Credit for Construction Companies
- SBA Loans for Construction Companies
- Term Loans for Construction Companies
Rates & Terms
The rates and terms depend on a wide range of factors which determine your business’ risk score. This includes: the product you’re applying for, how long you’ve been in business, credit history, use of funds, revenue & other financial factors. To determine which construction business loan is the best fit for your business, speak with a dedicated funding advisor to discuss your needs. Call (646)837-5522 today to compare your options.
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