Construction Business Loans and Equipment Financing
Construction businesses are the most established group that comes to us. 23% of the construction businesses that come to us had been trading under a year, against 37% across all industries. Nearly four in five have more than a year behind them.
That matters because most construction finance content is written as though you are scrambling. The actual population applying for this money is further along than the content assumes, and being further along changes which products are open to you and what they cost.
How established are construction borrowers?
More than most. Time in business is the single biggest gate in business lending, and construction clears it more often than any other trade we see.
| Construction | All industries | |
|---|---|---|
| Trading under 1 year | 23% | 37% |
| Trading 1 year or more | 77% | 63% |
Self-reported by more than 1,000 businesses that have used TopFunders.ai. Percentages for smaller industries rest on correspondingly smaller samples.
If you have been trading more than a year, you are past the point where most online lenders stop looking, and past two years you are inside bank and SBA territory. The practical consequence is that a lot of contractors apply for the fastest, most expensive product available when they would qualify for something considerably cheaper.
What being matched means
Businesses that complete our application are matched with a funding partner.
To be precise about what that means: matched is an introduction to the partner best positioned for that profile. It is not an approval and not a funding decision. Every partner underwrites independently and decides for itself.
The gap construction finance actually solves
The problem in this trade is rarely profitability. It is that the work is done weeks or months before the money arrives.
Progress billing means you invoice against completed stages rather than at handover, so your costs run ahead of your receipts for the whole job. Retainage holds back 5% to 10% of each payment until the project closes out, sometimes months after your last crew left site. Both are normal contract terms. Both mean a profitable job can leave you short of cash in the middle of it.
That shape is why invoice financing fits construction more naturally than it fits most trades. You are not borrowing against a forecast. You are borrowing against work already completed and billed.
Who this covers
The trades borrow in different shapes, and the difference is usually who holds the money and for how long.
General contractors carry the most exposure to progress billing and retainage, because they are paying subs and suppliers while waiting on staged payments from the client. Invoice financing against completed work fits that better than a term loan does.
Roofing is weather-driven and materials-heavy, with a compressed busy season and large supplier invoices landing before the job is paid.
HVAC, electrical and plumbing contractors combine scheduled service work with project work — the service side gives steadier deposits, which reads well at application time and often opens better terms than project income alone.
Bath and kitchen remodeling businesses are the closest thing in the trades to a retail cycle: material deposits up front, a defined project cost, and a homeowner rather than a main contractor paying.
Concrete work is equipment-intensive — mixers, pumps, forms — which means the spend can often secure its own financing rather than needing unsecured capital.
Painting contractors are the lightest on equipment and the heaviest on labour, so payroll between jobs is the working-capital line that matters.
Which products fit a construction business?
Invoice financing fits construction better than any other product, because it advances against work you have already completed and billed rather than against a forecast. Equipment financing covers plant and vehicles; a line of credit covers materials and payroll between draws.
| Product | Time to funding | Fits when |
|---|---|---|
| Invoice financing | 24 to 72 hours | You are waiting on progress payments or retainage |
| Equipment financing | Days, varies with the vendor | You are buying plant, vehicles or major tools |
| Online line of credit | 1 to 3 business days | Materials and payroll between draws |
| Online term loan | 24 to 48 hours | You know the amount and want a fixed payment |
| Merchant cash advance | Same day to 24 hours | You need money today and other options are closed |
| Bank or SBA loan | Weeks | You have 2+ years trading and cost matters most |
Funding times are measured after approval, not from when you start the application. The clock only starts once the lender has a complete file.
Because construction skews established, the bottom two rows are genuinely available to a lot of this audience. If you have two years of trading and clean books, going straight to a merchant cash advance is leaving money on the table.
What qualifies a construction business?
Lenders underwrite construction on time in business, deposit consistency and what you already owe — with signed contracts standing in as evidence of future receipts. Six months of trading is the common minimum, and two years opens bank and SBA options.
| What a lender checks | What helps |
|---|---|
| Time in business | 6 months is the common minimum, 2+ years opens bank and SBA |
| Deposit consistency | Lumpy project payments read worse than steady ones |
| Contracts in hand | Signed work is evidence of future receipts |
| Existing obligations | Fewer active advances means more available capacity |
| Customer concentration | One main contractor is one point of failure |
The specific thing that costs contractors offers is lumpy deposits. A business turning over the same money as a retailer, but receiving it in four payments rather than forty, reads as less predictable to an automated underwriter. If your statements look uneven, a lender that reviews contracts as well as deposits is worth finding.
What does construction finance cost?
Invoice financing is usually the cheapest route for a receivables gap, because it is secured against work you have already done. Equipment financing prices below unsecured options for the same reason: the plant backs the loan.
A merchant cash advance prices in factor rates rather than interest and can work out equivalent to APRs in the 40% to 350% range. Online term loans typically run 15% to 45% APR. Bank term loans run 6% to 20% for qualified borrowers.
Given how established this audience is, the honest advice is to check the cheaper end before taking the fast end. The reason to take fast money is that waiting costs more than the capital does: a crew you would otherwise stand down, a material order that holds up a stage. Not a bill that could wait three weeks.
What happens when you apply through TopFunders
One short application, about two minutes. We compare what you enter against what each of our 30+ vetted funding partners will actually consider, and introduce you to the single partner best positioned for a business like yours.
- Matching uses only the details you enter. There is no credit check of any kind at this stage, so getting matched does not affect your credit score.
- We never ask for your Social Security number or Tax ID to match you.
- One partner receives your details, not a dozen. You are not fielding calls for a week.
TopFunders is not a lender and not a loan broker. We do not originate, underwrite, price or fund loans, and we make no credit decisions. The matched funding partner reviews your application, sets your amount, rate and terms, and decides whether to fund you.
Frequently asked questions
Can I get a loan for my construction business?
Yes, and construction businesses tend to qualify for more than the content aimed at them assumes. 77% of the construction businesses in our applicant base have been trading a year or more, which is past the point where most online lenders stop looking and, at two years, inside bank and SBA territory.
How do contractors finance a cash flow gap?
Usually invoice financing, which advances against work already completed and billed rather than against a forecast. It fits progress billing and retainage better than a term loan does, because the gap it covers is a timing gap rather than a shortfall.
Can I get funding while waiting on retainage?
Invoice financing is the product built for it. Retainage holds back 5% to 10% of each payment until a project closes out, sometimes months after completion, and financing against those receivables converts the wait into working capital.
Can I get equipment financing for plant and machinery?
Yes. The equipment secures the loan, which generally means better pricing than unsecured options and more flexibility on operating history. Have a vendor quote or purchase agreement ready before applying, since that is the piece that most often holds the timeline up.
Do I need contracts in hand to qualify?
Not always, but signed work helps. Lenders underwrite construction partly on deposit history and partly on evidence of future receipts, and contracts are the clearest form of that evidence, particularly if your deposits look uneven.
What if my deposits are lumpy?
It is the most common thing that costs contractors an offer. Automated underwriting reads four large payments as less predictable than forty small ones, even at identical turnover. A lender that reviews contracts alongside deposits will read the same business more accurately.
Does checking my options hurt my credit?
No. Matching uses only the details you enter, so there is no inquiry on your credit file and no effect on your score. A credit inquiry happens later, if and when you make a formal application with the matched partner, and you consent to that separately.