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Construction Business Loans: Best 6 Options To Consider in 2024
As a construction company owner, you might be faced with the challenges of competition, seasonality, and spontaneous opportunities for growth. Because of these common problems, applying for a small business loan is often a normal stage of an expanding construction business.
Written by:Tetiana Sitiugina-Babiuk
Reviewed by: Jen Hubley Luckwaldt, Content Writer and Editor
Whether your construction business is brand new or already established, cash flow will always be on your mind. Construction business loans can be used to cover hefty construction expenses, such as on-site facilities, materials, temporary machine parts, and employee wages. Construction company owners can also benefit from having funds readily available on demand, in case of any unforeseen expenses.
In this article, we are going to cover everything you need to know to find the best small business loan for your construction business.
Top Picks for Construction Business Loans
- National Funding - Best for Construction Equipment Financing
- SMB Compass - Best for Variety of Construction Loans
- Lendzi - Best for Businesses With High Revenue
- Credibly - Best for Long-Term Business Expansion Loans
- Backd - Best for Cheapest Interest Rates
- Bluevine - Best for Business Lines of Credit
- Biz2Credit - Best for Working Capital and Payroll Expenses
While there are various types of financing available to finance construction business needs, choosing the right one to apply for comes down to several main factors.
Our financial experts highlight the rates, fees and terms of each lender and explain what makes them a good option. We also share potential downsides of each lender, and provide a rating methodology you can use to select the best option for your needs..
Best Construction Business Loans for 2024 - Full Overview
When it comes to construction business loans, there is no one-size-fits-all option. Instead, the ideal financial product for you will depend largely on the specifics of your business and what you need the money for.
Best Overall
Lendzi
Min. Annual Revenue
$180,000
Min. Time in Business
6 months
Min. Credit Score
At least 500
Key Features
- Borrow up to $4 million
- Competitive starting rates on most products
- Bad credit accepted
- See your options without hurting your credit
- Flexible terms: 3 to 15 months
- Excellent customer reviews on independent review sites
Pros & Cons
- Bad credit accepted
- Multiple loans to choose from
- Excellent customer satisfaction ratings
- Competitive rates and fees
- Fast funding times
- Income requirements may be high
- Rates may be higher for those with poor credit
Overview
Between purchasing heavy equipment and hiring labor crews, running a construction business is costly. Lendzi is both a direct lender and a lending marketplace with more than 75 lenders in its network. Because of this, they are able to offer multiple types of loans with varying requirements, and their mission is to help all businesses - regardless of credit - secure the funding they need.
Main Features
Lendzi offers three loans to those with poor credit: Merchant cash advances, equipment financing, and working capital loans. Merchant cash advances and working capital loans allow you to borrow up to $400,000 with terms up to 15 months. Equipment financing loans max out at $2 million, have terms up to 84 months, and typically come with lower interest rates than other forms of financing because the equipment acts as collateral.
To qualify for funding from Lendzi, you must be in business for six months and ideally have $180,000 in annual revenue. The minimum credit score accepted is 500.
If you have poor credit or have been denied funding elsewhere, reach out to Lendzi. The application takes a few minutes to fill out and will not impact your credit score. From there, a representative will be in touch in order to discuss your business further and review your lending options.
Biz2Credit - Best for Working Capital and Payroll Expenses
Interest rates
Starting at 7.99%
Loan Amounts
$25K to $500K
Min. Annual Revenue
$250,000
Key Features
- Working capital up to $2 million
- Term loans up to $500,000
- Term loan interest rate starts at 7.99%
- Loan Repayment 12-36 months terms
- Variable APR depending on the applicant
- Funding in 72 hours
- Soft credit pull
Pros & Cons
- Fast and easy application process
- Fast disbursement of funds
- Excellent customer service
- Multiple documents are required
- Strict eligibility criteria
- May charge additional fees
Overview
Working capital loans are typically used to fund day-to-day business operations and cover short-term expenses, such as buying materials or paying crew wages. Biz2Credit offers an incredibly fast 24-hour turnaround for its working capital loans–as long as you have all of your documentation ready right away.
Main Features
With a working capital loan from Biz2Credit, you can borrow up to $2 million with a daily, weekly, or bi-monthly repayment schedule. The term length and interest rate can vary and will be discussed during the application process. To qualify for the loan, you must have a minimum credit score of 575. In addition, your construction company must be in business for at least 6 months, with annual revenue of no less than $250,000.
Without a doubt, your construction company may benefit from Biz2Credit’s incredibly fast working capital loans, known for their flexible repayment periods and varying term lengths. To speed up the process, make sure that you have all the documents ready up front, and you will see the money in your bank account within 24 hours.
Bluevine - Best for Business Lines of Credit
Interest rates
Starting at 6.2%
Loan Amounts
Up to $250K
Min. Annual Revenue
$480,000
Key Features
- Funding up to $250,000
- Min. credit score: 625
- Min. time in business: 6 months
- Interest rates as low as 4.8%
- Loan Repayment 6-12 months terms
- Quick and simple application
Pros & Cons
- Fast application and fund disbursement
- Attractive interest rates
- Convenient online dashboard
- Person-to-person customer service
- Services only available for B2B companies
- Not available in Nevada, North Dakota, South Dakota, or Puerto Rico
- High rates for lower credit scores
Overview
As a construction company owner, you may benefit from having access to a business line of credit at all times. Luckly, Bluevine online lender offers just the right product. With lines of credit from Bluevine, you don’t need to worry about a lengthy application process or long funding decisions. You will be able to complete the application in a few minutes–and don’t be surprised to see the funds in your bank account in a matter of hours. It is worth noting that Bluevine doesn’t serve all states. Therefore, you need to make sure to review the list on their website prior to applying.
Main Features
Through Bluevine, you can apply for a business line of credit with a limit between $5,000 and $250,000 and a repayment period of either 6 or 12 months. If you carry the loan to full term, you might find that the interest rate gets expensive, so you might want to consider paying off the loan sooner. Because the line of credit is an unsecured construction business loan, it comes with little stricter qualification requirements. As such, you must have a credit score of at least 625, make at least $120,000 in annual revenue, and be in operation for at least 6 months.
To sum up, a business line of credit from BlueVine can help you significantly with the daily expenses of your construction company, at a reasonable cost–as long as you pay off the loan early.
Backd - Best for Cheapest Interest Rates
Factor Rate
Starting at 1.10
Loan Amounts
Up to $2 million
Min. Annual Revenue
$200,000
Key Features
- Borrow up to $2 million
- Min. Credit Score: 640
- Min. Time in Business: 2 years
- Industry best factor rate for MCA - as low as 1.10
- APR for the Line of credit product starts at 35%
- Flexible repayment terms up to 16 months
- Get funding in as little as 24 hours
- Check your rate with a soft credit pull
Pros & Cons
- Fast lending decision and funding times
- Large loan amounts available
- Flexible payment options
- Must be in business at least one year
- Rates not disclosed prior to application
- All industries will not qualify
Overview
Backd was founded in 2018 and has since funded more than $1 billion to 10,000+ small businesses. If you’ve tried traditional banks and lenders, Backd may be able to provide you with the funding you need. And best of all - they offer loan amounts up to $2 million, perfect for construction businesses looking to upgrade their equipment, expand their business, or take on a large project. Backd does not disclose rates and fees on their website; however, when you apply, you will receive all rates and terms prior to accepting the loan. We recommend reading through the terms thoroughly before you sign.
Main Features
Backd offers two loan products - working capital loans and business lines of credit. Working capital loans range from $10,000 to $2 million and terms are up to 16 months. You can make payments daily, weekly, or semi-monthly. Business lines of credit range from $10,000 to $750,000 with unlimited terms. Neither option requires you to put up collateral. If approved for either loan, funds can be in your account within 24-48 hours. To qualify for a working capital loan or business line of credit from Backd, you need to be in business for at least two years, have $200,000 or more in annual revenue, and 640+ FICO score.
If you’re in need of a large construction loan with flexible payment options, consider Backd. It takes just a few minutes to apply and a lending decision is given almost instantly.
Credibly - Best for Long-Term Business Expansion Loans
Interest Rate
8-25%
Loan Amounts
Up $250K
Min. Annual Revenue
$180,000
Key Features
- Min. Credit Score: 550+
- Min. Time in Business: 6 months
- Borrow up to Up to $250,000 in term loans
- Borrow up to $400,000 in working capital
- Term loan rates range between 8-25%
- Working capital factor rate starts at 1.09
- Simple application process
- As soon as same day funding
- Open to high-risk industries
Pros & Cons
- Simple online application process
- Low credit score requirements
- High borrowing limits - up to $5 million
- Additional fees charged
- Not suitable for new businesses
- Business plan required with the application
Overview
If you are looking to grow your construction business, a long-term business expansion loan from Credibly might offer an excellent funding opportunity at a reasonable cost. With long-term business expansion loans from Credibly, the application process should take minutes and you can expect to hear back in just a few hours. If approved, you can sign the contract on the same day and receive the funds in one to two business days.
Main Features
Long-term business expansion loans are offered for a period ranging between 18 and 24 months. The loan value can range up to $250,000, and the funds should be used specifically to help you grow your construction company. As such, a detailed business plan is required as a part of your application. While the required time in operation is not disclosed, it is unlikely that a brand-new business will qualify.
When it comes to loans for construction businesses, Credibly is a trusted loan provider that offers high borrowing limits, reasonable rates, and flexible options.
SMB Compass - Best for Variety of Construction Loans
Interest Rates
Starting at 7.99%
Loan Amounts
$10K - $10 million
Min. Monthly Revenue
$20,000
Key Features
- Loans up to $10 million
- Min. credit score: can go as low as 550 for certain loans
- Min. time in business: 1+ years in business, no startups
- Funding times: 5 to 7 days for term loans and 24 - 48 hours for line of credit
- Flexible terms: 2 – 10 years for term loans
- Interest Rates: starting at 8.99% for term loans
- Applying does not impact credit score
- Nine loan products to choose from
Pros & Cons
- Low, competitive rates
- Large loan amounts
- Loan terms up to 25 years
- Excellent customer service
- Poor credit not accepted
- Not available in all states
- Must be in business at least one year
- High revenue requirements
Overview
If you’re not sure what type of construction loan you need, SMB Compass can help. The lender offers nine different products, including business lines of credit, SBA loans, business term loans, equipment financing, asset-based loans, and more. Representatives are available M-F to answer your questions and walk you through the application process. By doing that, you can together determine the best construction loan for your business. Qualifications tend to be a bit stricter than other lenders, including a minimum credit score of 650 and $20,000 or more in monthly revenue, but if you qualify, you’ll get a competitive rate, flexible term, and large loan amount.
Main Features
SMB Compass offers nine different types of small business construction loans to borrowers. Their mission is to make loans more accessible to small business borrowers by providing cost-effective and flexible lending solutions. SMB Compass business loans range from $10,000 to $10 million with terms up to 25 years. Rates start at 7.99% for qualified borrowers. The lender has currently provided more than 1,200 U.S. businesses with more than $250 million in financing. To apply, simply fill out their easy online application. It takes just a few minutes and will not impact your credit score. If approved, funding can be dispersed within 24 hours.
If you meet the strict qualification requirements, SMB Compass is a fantastic lender offering nine different types of business loans. Applying takes just a few minutes and a representative can walk you through the application. If you’re approved, funds can be in your account within 24-48 hours on certain types of loans. Contact SMB Compass to get started!
National Funding - Best for Construction Equipment Financing
Factor Rate
Starting at 1.10
Loan Amounts
Up to $500K
Min. Annual Revenue
$250,000
Key Features
- Min. Time in Business: 6 months
- Min. Credit Score 600
- Borrow up to $500,000 in working capital
- Equipment financing up to $150,000
- Factor rate From 1.10
- Fast funding
- Early payment discounts
- Equipment financing repayment 2-5 years
- Working capital repayment 4 months - 2 years
Pros & Cons
- Favorable rates and terms
- Lenient qualification requirements
- Quick fund disbursement
- Easy online application
- Evidence of equipment purchase required
- Some additional fees apply
Overview
The equipment financing and leasing loan from National Funding is intended to be used specifically for the purchase of a piece of construction machinery or equipment.
Main Features
With an equipment financing and leasing loan from National Funding, you can expect to have more attractive rates and terms than with some other forms of financing. This is due to the fact that the purchased equipment itself will serve as collateral for the loan. However, you will be required to provide proof that you have actually purchased the machinery or equipment. With this type of construction business loan, the loan amount can range up to $150,000, with a 2- to 5-year repayment term.
If you are looking to buy an expensive piece of construction machinery or equipment, National Funding is a great resource to consider. You can receive up to $150,000 for the purchase, with reasonable terms and conditions.
Main Features of The Best Construction Business Loans
National Funding4.1
SMB Compass4.5
Lendzi4.5
Credibly4
Backd4.5
Bluevine4
Biz2Credit4
- Min. Credit Score - 575
- Min. Time in Business - 24 months
- Min. Annual Revenue - $250,000
- Loan Amount - Up to $150,000
- Interest Rate - Not disclosed
How to Choose the Best Construction Business Loan
- Loan features. What are the loan amounts, terms, and repayment optionality offered by the lender? Will the loan amount cover the cost of your business needs?
- Application process. How invasive are the application information requirements? Does the approval process include a hard or soft credit check? How long does it take to complete the application and receive the funds?
- Interest rates and fees. What interest rates are associated with the loan? Are there any additional charges, such as origination or borrowing fees?
- Qualification process. What are the qualification requirements, such as annual revenue, minimum credit score, and minimum time in operation?
- Customer support. Is there an in-person customer support team? Are supplemental tools and information readily available?
- Online user reviews. What do previous customers say on independent review sites like Trustpilot?
- Perks and bonuses. Does the lender offer a flexible repayment schedule or employ advanced technology? How transparent are they in their advertising?
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 application.
- 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 Business 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.
Conclusion
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 review the terms and conditions offered by each lender carefully. With thorough research, you will be able to find the right financial product for your construction business.
*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
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About the Author
Written by: Tetiana Sitiugina-Babiuk
Tetiana Sitiugina-Babiuk is an independent writer and SEO strategist helping a broad range of international clients to convey their stories for over five years.
More about me
Reviewed by: Jen Hubley Luckwaldt
Jen Hubley Luckwaldt is an editor, writer, and content strategist with a focus on personal finance, careers, and DEI. A small business owner for over a decade, Jen helps publications and brands create and optimize B2B and B2C content.
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