Construction Business Loans

Construction Business Loans

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    The construction industry is notorious for being capital intensive. Running your own construction firm takes hard work, expertise, and a lot of resources. You’ll need capital available to start new projects and fund the working capital for existing ones. Contractor financing is important to keep up with the need to purchase materials, buy new equipment, and to hire employees.

    Cash flow is a common issue among small business loans for contractors and owners, but it’s predominantly tough for construction businesses. Companies in this industry often wait for months before getting paid, making it more difficult for them to align their income and expenses. Quick access to construction financing can effectively bridge cash flow gaps.

    SMB Compass goes the extra mile to provide you with personalized construction business loans for contractors. By using the right financing solution, you can continue to grow your business without thinking about having the capital available to you.

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    The Best Financial Solutions for Construction Companies

    Construction businesses need working capital to bridge the gap between cash payables and cash receivables. SMB Compass offers construction business loans for contractors in the United States. Our reliable lending advisors will help you find the best construction business loan specific to your business needs.

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    How to Use Construction Business Loans

    From financing ongoing and future projects to covering unforeseen expenses, there are different ways you can use construction business loans.

    Here are some of the most popular ways to use construction financing:

    How to Know If You Need Construction Financing

    While construction business loans can help your business, not everyone needs them. If your construction company is young and you need capital to get you started, applying for a construction business loan may get your business up and running.

    However, startup companies aren’t the only ones with cash flow issues. Established companies come across financial problems every now and then. But this doesn’t mean that you should take out a loan. After all, a loan is a loan and you need to pay it back. You need to ensure that your business is profitable enough to repay the loan.

    SMB Compass cares about your business and we want you to make the most out of your finances. Our financial experts can help assess your construction company and determine whether you’re in a good place to apply for a loan. If so, we will help your business reach its full potential by pairing you with the right loan product.

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    What is a construction business loan?

    A construction business loan is financing that provides construction businesses or contractors the necessary capital to take on new projects as well as finish existing jobs. It’s common in the construction industry that there will be long payment terms and financing helps bridge this gap.

    How do you qualify for a construction business loan?

    The qualifications for a construction business loan are all dependent on the type of financing a business is looking to secure. For a bridge loan or a line of credit, revenue and time in business are important. If a business is looking for invoice financing or factoring the debtor has to be a reliable client with good trade credit history. Longer term financing such as term loans and SBA Loans more have sterner qualifications including a business owners personal credit and guidelines regarding the profitability of the business.

    How long does the application process take for a construction business loan?

    The timeframe of the application process for a construction business loan varies depending on if a business is looking for short or long term financing. The application process for a bridge loan or line of credit is minimal and will require limited documentation. The application process for long term financing such as equipment financing, asset based loans, and SBA Loans are longer and tend to require significant documentation.

    How would you use a construction business loan?

    Construction business loans are used for a wide range of different reasons including equipment, labor, and materials. Long payment terms need to restrain cash flow and financing provides businesses with the working capital necessary to operate effectively. Construction financing can also help consolidate existing debt as well as take on larger projects that cannot be possible with the current cash flow.

    Is collateral required for a construction business loan?

    Collateral may be required for a construction business loan if the financing includes equipment or is stretch out over a long period of time. Equipment financing will require the piece of equipment to be used as collateral. SBA Loans require that any and all available assets be used as collateral while shorter term financing options such as bridge loans and lines of credit may not require collateral.

    What are the different construction business loan options?

    Since the construction industry is so vast and unique there is a wide range of different construction business loan options to consider. Some of the most common financing options in that construction businesses and contractors use include equipment financing, bridge loans, lines of credit, and factoring. Asset based loans and SBA loans are also common in the industry and very help for business owners.