Do you currently have or plan to open a commercial construction business? Or are you looking for contractor loans specific to general managers, contractors or companies in the construction industry? It can be challenging to scale your company if you don’t have suitable financing options at your disposal. Even worse, you could be forced to turn away business if you don’t have the cash on hand to cover material and equipment costs.
Fortunately, there are options to provide the capital you need, along with an alternative payment solution to help cover supply costs.
Billd Commercial Construction Financing
Business Loans for Contractors and Construction Companies
Below is an overview of loan options available to contractors and construction companies.
Short-Term Loans for Construction Companies
You could get a short-term business loan from an online lender. These loan products generally offer short repayment terms, ranging from a few months to three years. Consequently, you’ll likely pay far less in interest than you would with other loan products. However, the monthly payments could be steep.
Business Line of Credit for Construction Companies
A business line of credit gives you access to a pull of funds you can make withdrawals against, up to the limit, during a set period. You’ll only make interest payments on the amount you borrow during the draw period and you can borrow and repay as many times as needed. Your company will be responsible for equal monthly installment payments (principal and interest) on the remaining balance over the repayment term when the draw period ends.
Equipment Financing for Construction Companies
Don’t have the funds on hand to pay for the equipment you need to complete jobs? Equipment financing is an option to cover costs and can be used for large and small equipment purchases.
Worried you won’t get approved due to your credit rating? The good news is many lenders will offer financing with competitive interest rates as the loan is secured by the equipment.
Billd Commercial Construction Financing
SBA 7(a) and Microloans for Construction Companies
If you’re having trouble qualifying for a business construction loan, you could secure financing through the SBA Loan Guarantee Program. You’ll need a personal credit score of at least 680 to be eligible for funding, and the SBA could match you with banks and credit unions in their lending network.
The 7(a) loan program from the SBA is one of the more popular options. Loans can be used for short or loan-term working capital, equipment and real estate purchases, new construction or renovation projects, or to start or purchase a business.
You will likely get a competitive interest rate if you qualify for funding with this construction business loan. However, it could take several weeks or months to get approved, and the application process is rather tedious. Consequently, it could be more sensible to search for funding elsewhere.
Invoice Financing / Factoring for Construction Companies
Tired of sitting around waiting for invoices to be paid? Enter invoice factoring – a solution that can alleviate the stress of customers not paying on time, especially for small business owners. You could receive up to 70 – 80 percent of the invoice amount through a lender who offers invoice financing without having to wait for weeks or months to get paid.
Some lenders won’t require a personal guarantee. However, they will evaluate your credit health before deciding if your company qualifies for the service. Also, note that invoices owed by consumers won’t qualify for factoring.
Another option is a Pay App Advance from Billd. With a Pay App Advance, you’re paid a percentage of your pay app, immediately, to ease your cash flow crunch and provide you the resources to pay your crew.
Pay App Advance helps you control your cash flow, plan projects with confidence, and eliminate uncertainty in the payment cycle.
Alternative Financing for the Commercial Construction Industry
It can be challenging to take on commercial construction projects and expand your business with limited funds if you can’t find loans for contractors and construction businesses. And if your credit rating isn’t quite up to par, securing a business loan may seem impossible. Or the lender could require you to jump through a series of hoops that forces you to miss out on lucrative opportunities while sitting around waiting to get approved.
Fortunately, material financing companies, like Billd, take care of supply costs upfront for commercial construction projects so you can focus on what you do best. You can use Billd to fund purchases for agricultural, commercial, government, industrial, multi-family construction and utility projects.
Here’s an overview of how it works:
- Get started by filling out this form to request enrolling with Billd today, there are no fees for registering with them. It only takes 15 minutes, your application could be approved in as little as 24 hours. You’ll need annual revenue between $500,000 and $20 million to qualify.
- Submit your material purchase request from the supplier to Billd. Many are approved the same day or within 24 hours, so your start date for the job won’t be delayed.
- Purchase the materials needed for the job using Billd. If the supplier is located in the U.S., they are eligible for payment through Billd.
- Billd pays the supplier directly via ACH or check (upon request) before the materials are shipped. This is usually done the same or the following business day the material purchase request is approved.
- You repay Billd for the materials within 120 days (or sooner if you receive payment from the general contractor before 120 days).
The seamless process gives you peace of mind knowing you have access to a payment solution to cover supply costs. Furthermore, paying with Billd gives you leverage to negotiate discounts with suppliers as they’re being paid in cash.
You won’t have to worry about passing up other projects because you haven’t been paid on existing ones. Furthermore, Billd helps prevent cash flow issues related to material costs so you can continue to scale your business.