Company
|
Min. Credit Score
|
Min. Time in Business
|
Min. Annual Revenue
|
Loan Amount
|
Interest Rate
|
Biz2Credit
|
575
|
6 months
|
$250,000
|
$25,000 - $2 million
|
Variable
|
Fora Financial
|
500
|
6 months
|
$12,000
|
$5,000 - $500,000
|
Factor 1.1 - 1.3
|
Fundbox
|
600
|
6 months
|
$100,000
|
$1,000 - $150,000
|
8.33% for 24 week terms
18% for 52 week terms
|
BlueVine
|
600
|
12 months
|
$120,000
|
$5,000 - $250,000
|
0.30% - 1.50% per week (Flex6)
1.50 - 6.50% per month (Flex12)
|
Credibly
|
Not disclosed
|
Not disclosed
|
Not disclosed
|
$150,000 - $5 million
|
8% to 25% APR
|
Kabbage
|
None
|
12 months
|
$50,000
|
$1,000 - $150,000
|
24% - 99% APR
|
National Funding
|
500
|
12 months
|
$100,000
|
Up to $150,000
|
Not disclose
|
How Can You Use a Construction Business Loan?
These days, you can find a construction business loan for virtually any situation. For example, if you are new to the construction industry and are looking to start or grow your business, the loan capital can help you market your business, purchase materials, hire workers, and bid on projects. Your construction business will also need everything from tools to heavy-duty machinery to specialized software.
Finally, you will also need to manage everyday expenses of your construction company, including office supplies, insurance premiums, taxes, legal fees, and salaries. A specialized construction business loan will cover these expenses and help you to keep your business running smoothly.
Finally, you will also need to manage everyday expenses of your construction company, including office supplies, insurance premiums, taxes, legal fees, and salaries. A specialized construction business loan will cover these expenses and help you to keep your business running smoothly.
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 construction loans 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 loans can include equipment financing, lines of credit, term loans, and even business credit cards, - each of them working in a different way.
- 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 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. For example, having a simple business credit card on hand can be an excellent alternative for smaller daily expenses, when you need the money fast. With business credit cards, the approval time is typically short, but the rates are high, and limits are low.
You might also consider applying for a Merchant Cash Advance. With this type of financing, you receive a quick access to a lump sum of funds in exchange for a portion of your future profits. In this case, the lender will automatically deduct a percentage of your sales through 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 a certain 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 just the right financial product for your construction business.