Subcontractor Loans

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    Financing for Subcontractors

    Specialty contractors or subcontractors specialize in a construction trade and are responsible for completing a specific portion of a construction job. Subtractors are usually hired by a general contractor that has a contract to build and manage a construction project. With this being the case, subcontractors are usually the last contractors to get paid on a construction job. Specialty contractors that have the cash reserves to support a job without a subcontractor loan do, while others utilize subcontractor loan programs to finance new jobs.

    Subcontractors typically bill in arrears for time and materials and are paid when paid. Paid when paid contracts mean that a subcontractor is not paid until the general contractor is paid by their client. This puts subcontractors at the bottom of the payment waterfall, making late payments a common occurrence. Loans for contractors programs are a common way to help support the upfront and ongoing expenses.

    Subcontractor loans are a great way to make sure that operating cash flow is strong for day-to-day expenses. Whether you are looking to purchase equipment or buy materials, there are subcontractor loan programs available. Below are some of the ways you can use a specialty contractor loan program.

    • Purchasing new equipment
    • General working capital
    • Purchasing new tools
    • New project bids
    • Mobilization funding
    • Material expenses
    • Refinancing debt
    • Payroll
    • New project bids
    • Hiring new employees
    • Advertising and marketing
    • Purchasing new equipment

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    Subcontractor Loan Options

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    How to choose an Subcontractor Loan

    Choosing a suitable loan for contractors can make the difference between a successful project and one that’s not. It’s crucial to make sure that you choose a subcontractor loan program that will provide the right about of money, at the right cost, and with the most flexibility. For example, to purchase equipment for a subcontracting business, you should use a long-term equipment loan. A line of credit is best for you if you are purchasing job-specific materials. Aligning the subcontractor loan program to the use of funds can make jobs more profitable and give you the operating cash flow to continue growing. At SMB Compass, we will guide you through the application process and make sure that you choose the right general contractor loan program for your business.

    Ready to apply for a Subcontractor Loan?