Live market data
Pulled from official U.S. government APIs. Click a card to view the source.
TL;DR
Construction contractors need lines of credit (for materials and labor before progress draws), equipment financing (for trucks, excavators, tools), and working capital (for payroll between draws). Most contractors qualify with $35K+ monthly deposits and 6+ months in business. AR-heavy GCs often add invoice factoring on completed milestones.
Why contractors need a stack, not a single loan
Construction cash flow is brutal: pay materials, pay subs, pay payroll — then wait 30–90 days for the progress draw. Then do it again on the next phase. A single loan rarely covers all of that. The right stack is line of credit + equipment financing + occasional MCA for emergency cash.
The construction financing stack
- •Line of credit — primary working capital tool. Draw before draws come in, repay after.
- •Equipment financing — for trucks, trailers, excavators, lifts, tools. Up to 100% LTV.
- •Invoice factoring — for completed milestones with slow-pay GCs or municipal clients.
- •Term loan — for buildouts (yard, shop, office) or business expansion.
Pros and cons of a contractor line of credit
- •Pros: only pay interest on what you draw, revolving, fits draw-pay-draw cycle.
- •Cons: requires 600+ FICO and 12+ months in business for best pricing.
Common mistakes contractors make
- •Using MCA for material orders that should sit on a 30-day vendor account
- •Skipping equipment financing on a $200K excavator and missing Section 179
- •Funding payroll on an MCA when factoring the completed milestone is half the cost
- •Underestimating retention holdbacks (often 5–10% of contract value)
Run the numbers
Business Term Loan Calculator
Standard amortization: fixed APR, fixed weekly payment. Same formula banks and SBA lenders use.
Methodology
Standard amortization formula: P × r / (1 − (1 + r)−n), where r is the monthly rate (APR / 12) and n is the term in months. APR is the annual percentage rate as defined in the federal Truth in Lending Act (12 CFR § 1026.22). Actual lender quotes may include origination fees that increase APR.
Related questions
Related guides
Best Business Loans for Trucking Companies in 1970
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Best Business Loans for Restaurants in 1970
From MCAs to SBA 7(a), the financing options that fit restaurant cash flow — with realistic costs, approval thresholds, and pros/cons by product.
Documents Needed for a Business Loan (1970 Complete List)
The exact paperwork lenders ask for — and what you can skip — by product type.
Sources & references
- Current Employment Statistics (CES)— U.S. Bureau of Labor Statistics
- County Business Patterns— U.S. Census Bureau
- SBA 7(a) and 504 Loan Program data— U.S. Small Business Administration
- Bank Prime Loan Rate (DPRIME)— FRED · Federal Reserve Bank of St. Louis