Construction Company Loans up to $650,000
Applying for a construction business loan is a significant financial decision. We’ve already helped lots of construction companies to prosper and can approve up to $650,000 within 48 hours. Apply Now. Check how much you can get now with no obligations, no fees, and no impact on your credit score.
Construction company loans are a type of small business loan that helps construction business owners increase cash flow, accelerate growth, and overcome logistical challenges in day-to-day business operations.
What Are Construction Company Loans?
Construction company loans help those in the construction industry fund their operations. Having extra funds available helps a construction business cover unexpected expenses and keep operations running smoothly.
Bidding for new projects, hiring additional employees, heavy machinery purchases, and maintaining cash flow during seasonal job gaps can be covered by increasing working capital through construction business financing.
Types of Funding for Construction Companies
There are a variety of funding solutions available for construction companies that are looking to sustain or grow their operations. Merchant Cash Advances allow contractors to borrow money against their future earnings. These are paid back through a percentage of sales.
For construction businesses that need to access flexible financing, a business line of credit can provide access to a revolving line of credit, much like a credit card. You’ll only pay interest on the amount that you borrow, and the line of credit becomes available again as the balance is paid back.
Small business loans are traditional installment loans that offer construction companies a lump-sum payment with fixed monthly repayment turns, typically repaid over 1 to 5 years. Alternative loan types include SBA 7(a) loans, which can be borrowed with few restrictions and longer repayment terms, up to 10 years.
If your construction business needs new equipment, consider equipment financing. This allows you to purchase new equipment, which may help you increase revenue or offer new services. The equipment typically serves as collateral for the loan, and repayment periods typically last a few years, allowing the equipment to pay for itself.
Lastly if you find yourself short on cash due to unpaid invoices, construction companies may utilize invoice financing to gain access to cash in advance of their customers making payment. This arrangement allows up to 80% of the invoice value to be received in exchange for a small fee.
How Do Construction Company Loans Work?
Construction business loans work just like loans for any other industry. Once a business owner goes through the loan application process and gets approved, the lending institution dispenses a one-time lump sum payment for the amount of money the borrower was approved for.
After the funds are in the borrower’s possession, the borrower is legally obligated to repay the total amount of the loan plus interest over a certain period. Payments are to be made monthly and are fixed amounts designated in the loan agreement.
Ways to Use Construction Company Business Loans
While some small business loans like the SBA 504 restrict how a construction company may use funds, most do not. As a result, construction business loans can be used for any needs that may arise within your construction business.
This includes purchasing raw materials, maintaining cash flow during seasonal lows, covering long billing cycles, paying taxes, buying heavy machinery, scaling your existing business, contractor expenses, advertising campaigns, and any other costs commonly associated with running a construction business.
How to Qualify for a Commerical Construction Loan (With the Best Rates)
Financial institutions look at several key factors when deciding what rate to charge a potential borrower. These factors include business and personal credit score, credit history, time in business, industry risk, collateral, type of loan, and loan term.
A commercial construction loan can be a blueprint for growth or significantly impact the ability of a construction company to be profitable. The interest rate and payment amount are often the deciding factors for whether or not to take out financing.
Even though some of these figures are certainly out of your control, having a solid application in other areas (like credit history) is highly beneficial and will save money in the long haul.
How to Apply for the Best Construction Business Loan
Eligibility Requirements
To be considered by mCashAdvance, you must meet the following requirements:
- A U.S. citizen or legal resident
- Minimum age of 18 is required
- Your construction business must be at least six months old
- A minimum credit score of 500 or higher
Loan Limits
Construction business funding through mCashAdvance is available up to $500,000, depending on individual business needs.
Term Lengths
Depending on the amount funded and individual agreement, the typical length for repayment is one to five years.
What Are the Benefits of Getting a Loan for Construction Companies?
Benefits
When used strategically, financing a loan can significantly scale business operations, fueling rapid growth. Loans typically carry lower rates and more favorable terms than other forms of financing. Equipment loans are among the most accessible types of loans because the purchased equipment secures the loan through collateral.
Drawbacks
Newer businesses and companies with the most significant financial needs are frequently rejected for funding from conventional lenders. Additionally, SBA loans can take weeks or months to process with no approval guarantee. Finally, if an owner manages to get approved, there may be restrictions on where and how to use loan funds.
Construction Company Loans Frequently Asked Questions
What Are Construction Loan Interest Rates?
Conventional loans from traditional banks or credit unions can have annual percentage rates (APRs) ranging from 4% to 13%. Alternative lenders can have loan APRs ranging from 7% to over 100%. The interest rates you are charged will ultimately depend on the strength of your loan application and the amount of money you would like to borrow.
Why Do Banks Decline Construction Business Loans?
The most common reasons banks decline construction business loans are too much pre-existing debt, low credit scores, not enough credit history, insufficient collateral, and poor business performance. However, many of these factors can be rectified with time for newer businesses that have not yet established themselves through the eyes of a lender.
What Do I Need to Obtain a Construction Business Loan?
Eligibility requirements for loans vary, but there are a few similarities that all lenders like to see. Typically, a business should have been established for two years or more, have a good credit history, a statement of loan purpose, annual profit/loss statements, and some form of collateral. Meeting most of the requirements will give your business the best chances for loan approval.
Is It Difficult for Construction Businesses to Get Loans?
Getting approved for construction business loans can be challenging. Having good credit history and satisfactory business operations are good places to start. For those who are having trouble, merchant cash advances, lines of credit, and invoice financing may offer alternatives for quick financing with less stringent criteria for approval.
Is Collateral Required for Construction Business Loans?
Collateral is sometimes required for loans for construction companies due to the high dollar value of requested loan amounts. Construction business loans can be secured through various assets such as equipment, bank accounts, real estate, land, and accounts receivables. Alternatives such as merchant cash advances do not require collateral.
Funding Your Business Is Our Business
Construction Company Loans Can Help Grow Your Business
Many lending options are available to help those in the construction industry protect or scale their businesses. Contact mCashAdvance to apply for financing or speak with an advisor to learn more about our innovative funding options.
Don’t Allow a Lack of Funding
to Hold your Business Back
It’s Time To Move Your Business Forward!