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Construction Loans for Small Businesses

  • November 23, 2020
  • Written by : Carl Eschenburg

The construction industry is essential for not only growth in businesses, but also the growth in the country overall. Construction is by far one of the most impactful industries to date and plays a big role in the United States economy.

This industry contributes through the building, manufacturing, mining, and many diverse services, all making our lives easier, more integrated, and up-to-date.

Even with over 680,000 employers, 7 million employees, and nearly $1.3 trillion in generated revenue, this industry’s businesses still require a few extra dollars to help maintain and grow each year.

The construction industry is growing exponentially and quickly. Meaning more employees are being hired, more projects are underway. Thus, the cycle repeats, and more spending must take place.

However, just as other industries do not have magic money at their disposal, neither does the construction industry. That’s where construction business loans come into play.

Why does your construction business need funding? 

More often than not, construction businesses face irregular and/or unreliable streams of revenue, considering the projects and jobs themselves are not quite entirely predictable either. 

Many of these jobs are secured through a bidding process. We know what that means: competing for the job at hand. This method of business is definitely necessary but also can be disappointing. Leaving your business without a new project or future revenue. When this is not the case, however, and your business does secure a new job. It is very common to not receive payment for that job for a significant and sometimes detrimental amount of time. 

What are the different types of construction business loans?

Construction Cash Advance

Whether you are waiting for a payment on a project, need to purchase new equipment quickly, or other, a cash advance may be the best option for you. With this option, you will be given short terms and will be expected to repay the lump sum with a fixed rate from your business bank accounts. To qualify, you need to have been in business for 3 months. Also, you should have a credit score of at least 480, and have at least $8,000 in monthly revenue.

Construction Business Line of Credit

Every now and then, surprise business expenses arise that we as business owners may not be prepared for. Utilizing a line of credit allows you to pay for surprise costs immediately, repay only what you spend, and repeat as often or as little as necessary. To qualify, you will need to have been in business for 6+ months, have $100,000 in revenue, and a 600+ FICO. 

Construction Asset Based Lending

With construction, comes big and valuable machinery, property, land, and more, also known as big and valuable assets that can be used as collateral. The more valuable the asset, the more valuable the loan. To qualify for asset based lending, you’ll need to have been in business for 12+ months, have a 600+ credit score, and have $100,000 in annual revenue. Even if you do not have enough revenue to qualify for funding, this loan is still attainable for your business.

Construction Equipment Financing

As we’ve mentioned, the construction industry makes daily use of machinery, land, and transportation vehicles. If you need help purchasing new equipment or would like to place a lien against your company’s already owned equipment. We can help you secure funding or recoup up to 50% of the purchase price. To qualify for equipment financing, you will need to have been in business for 12+ months, have a 650+ credit score, and $100,000 in revenue. 

Construction Invoice Financing

Let’s face it. You probably don’t get paid on time every time, and when this happens. You probably have less money in your bank account to purchase important supplies or pay your employees. If this happens more than you’d like it to, this option may be the best fit for you. Invoice financing is based on your accounts receivable and with us, we can help you pay up to 90% of any outstanding invoices you have (even without an impressive credit score). To qualify, you’ll need to have $250,000 in annual revenue and to have been in business for at least one year. 

How can you gain working capital for your construction business as soon as possible?

Come talk to us here at REIL Capital. We will help make this process as easy, quick, and transparent as possible for you. 

We’re business owners too and we understand the want for financial security, the desire to work with authentic people, and the need for working capital. 

No more wasting time. Secure funding for your construction business with the REIL family today!

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