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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