Loans for Commercial Construction General Contractors and Subcontractors

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Many commercial construction contractors and subcontractors miss the beat when bidding on a project because they can’t secure loans for contractors or financing to purchase materials upfront. Uneven and unpredictable cash flows make it hard to cover expenses and cater to the clients’ needs timely. 

While contractor financing programs vary tremendously, loans for contractors are only an option. As an example, Billd is a payment solution specifically designed for commercial construction contractors and sub-contractors. Through the platform, you order materials, access 120-days flexible payment terms with the suppliers, and get what you need to start the project. This solution reduces your time spent applying for material financing, so you can take on more projects quicker to grow your commercial construction business.

General Contractor Loans 

Both commercial and residential general contractors face a variety of expenses related to day-to-day business. From equipment and materials to salaries and training, they have numerous financial responsibilities. Meanwhile, the workflow instability makes it tough to cover all the expenses.

General contractor loans help contractors land profitable new projects while managing the existing work without worrying about daily expenses and payment delays. These loans are designed explicitly with contractors’ needs and business specifics in mind.

Circumstances That Warrant Loans for Contractors 

Financial planning in the construction industry can be complicated. Contractors often rely on the previous client’s promise to make timely payments to take on a new project. When the payment for completed work is delayed, they face a gap in financing.

When the working capital fails to cover ongoing needs, contractors need to turn somewhere else for funding. The circumstances that warrant loans for contractors include:

  • Equipment — you’ve taken on a large project that requires expensive equipment. While renting may seem like a good option, it’s a short-term solution. To save money in the long run, you need to buy the necessary equipment. A loan can help you do it.
  • Materials and labor — when working on a large project, you may have to wait for weeks for the funds to come in. However, you need to pay for materials and labor upfront. Loans can bridge this funding gap to prevent delays.
  • Slow seasons — the construction industry is highly volatile. The “feast or famine” setup makes it hard for contractors to survive slow seasons. Meanwhile, in many states, the cold and wet weather makes it impossible to complete various projects for several months a year. The right loan can help contractors survive the dry spell.
  • Marketing — to attract more customers, contractors of all sizes need to invest in marketing. A volatile cash flow can make it hard to cover advertising expenses. A loan can support your marketing campaign, attracting more clients and driving your business forward.

Contractors often face a disrupted cash flow. To bridge the gap without losing clients or hindering your reputation, your business may need a loan or a payment solution like Billd to help you keep growing your business.

Types of Business Loans for Contractors 

For residential and commercial contractor financing, you can take advantage of the following loan types.

1. Unsecured Business Loan 

An unsecured business loan is a loan from a lender that doesn’t require you to provide collateral. The decision of whether to approve such a loan is based on the creditworthiness of the applicant. 


  • Shorter loan application approval time
  • No collateral required
  • No risk of losing the collateral


  • High-interest rates
  • Hard to qualify for
  • Inability to secure a considerable loan amount

Without collateral, the lender is taking a more significant risk giving you a loan. This results in higher rates and complex approval requirements. However, this loan can be an excellent solution for small contractors who seek quick funding.

2. Business Line of Credit 

A business line of credit works similarly to a credit card. Contractors can borrow money up to a specific limit and then pay interest on whatever they borrowed. You can withdraw and repay money according to the terms as long as you don’t exceed your limit.


  • Access to cash at any time
  • Straightforward interest-only payment terms
  • No early payment penalties
  • Building of business credit history


  • Numerous fees
  • Hard to qualify for (even once approved, you may need to undergo annual reviews)
  • Low limits
  • Long approval process

This loan option can be a good solution for small contractors who prefer financing flexibility and know-how to maintain complete control of their funds.

3. SBA Loan 

SBA is a small business loan, which the U.S. Small Business Administration partially guarantees. Through various SBA funding programs, this government agency provides loan guarantees of up to 85%. SBA doesn’t offer contractor loans directly. It’s done through contractor financing companies.


  • Low-interest rates
  • Long repayment period
  • Little or no collateral required


  • Time-consuming approval process
  • High requirements to qualify
  • Good credit and personal guarantee often required

While an SBA loan has excellent loan terms for contractors, it can be hard to qualify for.

4. Equipment Financing 

If you need money specifically for equipment, you can take advantage of an equipment loan. To get this loan, you need to acquire a quote for the equipment you want to purchase. When the loan is approved, the lender covers a big part of the expenses.


  • No collateral
  • Flexible payment scheme
  • Fast approval


  • Lack of flexibility (can only be used for equipment)
  • Higher rates than for traditional loans

Equipment financing is an excellent solution for contractors taking on large projects and want to eliminate equipment rental costs. If you’re going to buy materials, check how Billd can help you purchase construction materials with flexible payment terms with less admin time.

5. Invoice Factoring 

With invoice factoring, a lender provides you an advance (usually about 80%) on payments for outstanding invoices while waiting for the client to pay. When the client finally pays, you forward the money to the lender and get the outstanding 20% minus the service charge.


  • Immediate cash flow
  • High chances of approval
  • No collateral


  • High fees
  • Risks (if the client doesn’t pay)

Invoice factoring isn’t an extremely cheap funding option. However, it can help you avoid cash flow disruptions and maintain good relationships with employees, sub-contractors, and other parties.

Enhancing Your Chances of Getting a Contractor Loan 

Here are a few things you can do to improve your chances of being approved for one of the above loan options:

  • Maintain an excellent personal and business credit score.
  • Choose a lender with your best interests in mind.
  • Create a solid business plan for why you need a loan.
  • Work on your balance sheet (reduce negative balance days, review your monthly revenue).

Make sure to have a clear understanding of why you qualify for a contractor loan. This can help you narrow down the list of lenders and increase your chances of approval. 

Billd: Construction Materials Financing

When bidding on a project, many contractors worry about the upfront materials’ costs. To cover them timely, you can explore alternative lenders like Billd.

Billd offers financing for construction materials without surprise or hidden fees. The lender pays the material supplier directly and gives contractors 120 days to repay the amount.

The “buy now, pay later” option allows you to bid on larger projects without worrying about cash flow disruptions and payment delays.

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