Min. Credit Score
Min. Time in Business
Min. Annual Revenue
$25,000 - $2 million
$5,000 - $750,000
Factor 1.1 - 1.9
$1,000 - $150,000
8.33% for 24 week terms
18% for 52 week terms
$5,000 - $250,000
0.30% - 1.50% per week (Flex6)
1.50 - 6.50% per month (Flex12)
Up to $250,000
9.99% to 36% APR
$2,000 - $250,000
Varies (see above)
Up to $150,000
How Can You Use a Construction Business Loan?
These days, you can find a construction business loan for
virtually any situation, whether you’re new to the industry or expanding your
operations. Use the loan capital to:
- Market your business
- Purchase materials
- Hire workers
- Bid on projects
- Buy or lease construction equipment including tools,
heavy-duty machinery, and specialized software
- Manage everyday expenses like office supplies, insurance
premiums, taxes, legal fees, and salaries
How to Get a Construction Business Loan?
The specific application requirements and procedures will
vary from lender to lender and from product to product. In general, to get the
application process started, you will need to:
- Estimate the costs of your construction project.
- Review the qualifications of your business, such as its
credit score, annual revenue, and time in business.
- Compare the different types of loans for construction
businesses and determine which one works better for your needs.
- Find a lender that offers the type of loan you are looking
for and has acceptable qualification requirements.
- Collect the required documentation and complete the loan
- Submit your application, sign the loan agreement, and
complete the closing process.
Most of the time, to qualify for a construction business
loan, you would need to have a credit score of 600 or more, a strong annual
business revenue, be in business for one year or more, and be able to offer a
down payment between 10% and 30%.
How Do Construction Business Loans Work?
A construction business loan is any type of loan that is
used to help fund a construction business. These construction business loans
can include equipment financing, lines of credit, term loans, and even business
credit cards–each of them working differently.
- Equipment financing. With equipment financing, the lender
issues you a lump sum amount needed to purchase equipment for your business,
and the equipment itself functions as collateral in case of default.
- Business lines of credit. Here, the lender gives you access
to a predetermined amount of funding, which you can draw from as you need. The
line of credit can be secured or unsecured, and you would only need to pay
interest on the funds you use.
- Term loans. A term loan provides borrowers with a lump sum
of money upfront in agreement to specific borrowing terms. As such, you would
agree to a certain interest rate, repayment schedule, and other terms.
- Business credit cards. Business credit cards can act as
short-term, interest-free funding with flexible repayment options. This form of
construction business loan can help you track your spending and establish a
good credit history for future business loan applications.
Alternatives to Construction Loans
While commercial construction loans might work well to
finance the needs of your construction business, they aren’t your only option.
- Get a business credit card for smaller daily expenses, when you need
the money fast. The approval time is typically
short, but the rates are high, and limits are low.
- Apply for a Merchant Cash Advance.
- With this type of financing, you receive quick access to a lump sum in
exchange for a portion of your future profits. The lender will automatically
deduct a percentage of your sales through a credit or debit card until the
borrowed amount is repaid in full.
We have reviewed the best construction business loans on the
market today, but the ultimate decision should be based on the specifics of
your business and what you need the money for. For example, if you are planning
to buy essential equipment for your business, the equipment financing and
leasing loan from National Funding will be your best choice. On the other hand,
if you have a business growth plan you wish to turn into life, consider
applying for a long-term business building loan from Credibly.
Whatever financial product you end up choosing, make sure to
carefully review the terms and conditions offered by each lender. With thorough
research, you will be able to find the right financial product for your