Explore customized solutions for commercial construction financing
Every small construction business has unique needs. That’s why we strive to offer custom financing solutions that perfectly fit your company’s business requirements.
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An Overview of Commercial Construction Loans
Construction is a vital part of a thriving economy, and we rely on construction businesses like yours to renovate our homes, improve our plumbing, roofs, or windows, and bring new buildings to our communities. The industry continues to grow, yet that demand is still met with its own challenges. Construction business owners are familiar with challenges like fluctuating demand, weather-related disruptions, and employee turnover – all causing issues with cash flow.
A small business loan provides access to financing, so those challenges don’t disrupt your business. SmallBusinessLoans.com matches business owners with lenders who know the challenges construction companies face and who have decades of experience in securing financing for businesses. Here you’ll learn about loan options available to you and what type might work best for your business.
What is a construction business loan?
A construction business loan is a short-term financing solution used to finance aspects of the business, cover unexpected expenses, or help foster growth.
Construction business owners can receive up to $500,0001 in funding and have many loan options available to choose from. In addition to several loan types, there’s also a choice in where you get your funding. While traditional lenders such as banks delay progress with extensive qualifications and long approvals, alternative lenders step in as digital-first financing solutions. SmallBusinessLoans.com partners with alternative lenders who have easier applications, flexible qualifications, and fast processing to ensure businesses can keep up with demand or maintain operations when they need it most. No matter your business’ goals, there’s a financing solution that can help you get there.
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Types of construction business loans
Your business has unique challenges and requires a customized loan type. Here are some typical loan types construction business owners use and know that our lending partners work closely with you to tailor the right loan to your needs.
If your business needs cash to cover an unexpected incident or cover the cost of operations, a short-term loan provides peace of mind and keeps your business up and running. Short-term business loans are temporary financing solutions with most repayment terms lasting one year or less.
A working capital loan supports businesses that are lacking sufficient cash flow with the funding they need to continue operating smoothly. It is designed to cover everyday expenses rather than long-term assets or planning. This can be used to provide much-needed capital for your business and help fund the hiring of more employees, purchasing equipment or project materials, or give you the cash on hand to grow your business.
Heavy equipment financing loan
Equipment financing provides a solution for businesses that need to cover the cost of an equipment upgrade. Construction business owners can purchase or lease equipment such as bulldozers, backhoes, or pipe cutters for their business. A large variety of new or pre-owned equipment qualifies, so you can secure the crucial equipment you need.
These three loan types are the most common, but a loan can be customized to your business. Match with a lender today to find your perfect solution.
Benefits of commercial construction loans
Getting access to funding provides your business with the most important thing – your peace of mind. But here are examples of what financing can be used for in your construction business:
- Provides capital to purchase construction equipment
If your heavy equipment breaks down, construction loans will help your business run with minimal outage time. Buy or lease equipment critical to your business such as trenchers or loaders.
- Ensures inventory supplies are stocked and readily available
Commercial construction financing plays a vital role in efficient inventory management of construction businesses. Stock up on concrete, steel beams, and other building material with help of construction business loans.
- Helps hiring skilled tradespeople
Grow your construction workforce by hiring skilled personnel in your team. Manage their payroll, hikes, and other benefits with construction business loans.
- Preserves cash flow
By funding emergency business expenses through commercial construction loans, your construction company can safeguard their working capital for covering the critical day-to-day operations.
- Helps market your business
From establishing a brand image to winning new construction projects, businesses can gain a lot from marketing campaigns. Expenses related to marketing and promotions can be covered using construction loans.
- Expand your business
With access to additional capital, construction companies can be better prepared to deal with sudden spikes in construction demands. The loan amount can also be used to acquire other small construction businesses to expand your operation.
You can use your small business loan for a wide variety of things for your business. Ineligible uses vary by lender, but common ineligible costs are furniture, personal expenses, or real estate closing costs.
Qualifying for a commercial construction loan
Compared to traditional lending institutions, qualifying for a construction loan is a lot easier with many alternative lenders. The eligibility requirements are simple and straightforward. Here’s an example of commercial construction loan requirements with alternative lenders:
- Business should have been in operation for at least six months
- Annual gross sales should be a minimum of $250,000
- Personal and Business credit scores should be in the range of fair to good credit.
Many traditional lenders require a lot of paperwork and documentation for their loans – but our partners keep the paperwork to a minimum. Required materials are often limited to a credit check, income statement, and bank statements so you can get approved for construction business loans faster.
How do I get a loan for my construction business?
Now, you know what loan option fits your needs and the necessary qualifications. After getting matched with a lender from SmallBusinessLoans.com, it’s time to gather your application materials and get started. Let’s take a look at the five easy steps it takes to secure funding for your business:
- The business needs to meet the minimum qualifications for a loan set by the lender.
Most alternative lenders require a business to be in operation for six months and a minimum $250,000 in gross sales.
- The business owner then fills out an application and provides the required materials.
Often, you’ll be asked to provide bank statements, balance sheets, and business and personal credit scores.
- The lender examines the loan application, credit history of the borrower, and other qualifications.
At SmallBusinessLoans.com, you’ll be paired with a lender who quickly reviews applications.
- The lender determines the loan amount, interest rate, and repayment terms.
If the business accepts the loan terms, the funds are then transferred to the business.
- The business repays the loan according to the terms of the agreement.
Get construction loans with SmallBusinessLoans.com
Don’t let access to capital stop your construction business from growing as much as it can. Fast, reliable funding can take your construction business to the next level or carry your business through uncertainty. SmallBusinessLoans.com can help you get funding quickly and efficiently. We’ve already done the work in sourcing top lenders to partner with, so you have one less thing to research. We’ll match you with a lender who specializes in the construction industry so you can get financing solutions specifically tailored to your needs and secure the necessary funding for your business.
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Frequently Asked Questions
If you still have additional questions about how to qualify for a construction small business loan and get up to $500,001 in funding from one of our lender partners, we have answers for you below.
There are many loan types to choose from, depending on what your business needs. The best loan for your business depends on how much financing you can afford, length of term, and what you’re using the funding for.
SBA loans can be used for construction businesses. However, the extensive requirements and long-lead times for an SBA loan make it challenging to secure funding. Alternative lenders, like our partners, provide fast processing times and higher approval rates than SBA loans.
Many traditional lenders require a high credit score to get approval for a loan. Alternative lenders have more flexible qualifications, yet it is still best suited for those with fair to excellent credit.
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