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Construction contractors need access to working capital in order to cover business costs, such as equipment, materials, and labor. Since most construction contractors typically do not get paid until a project has come to completion, most end up digging into business savings or taking out short-term bank loans to cover expenses between and at the start of projects. In order to offset business expenses without taking on debt or depleting savings, many construction contractors are taking advantage of business credit lines.

Asset-Based Credit Lines For Construction Contractors

Instead of going through traditional lending channels, some construction contractors opt for asset-based business credit lines. These revolving credit lines are structured around property – such as real estate, equipment, inventory, and receivables – owned by the contracting company. These credit lines can be accessed as needed, as opposed to having to take a full sum (and subsequent debt) through traditional bank loans. On top of it all, the spending limits of asset-based credit lines increase as the overall value of the company’s property increases. So, as a construction contractors acquire new equipment, expand into larger facilities, and take on larger jobs for more revenue, the limit on the line of credit can be renegotiated for a higher amount.

Unsecured Business Credit Lines

Construction contractors who have been operating independent businesses for under two years can access special programs for unsecured credit, which are not offered by banks and other traditional credit providers. Approval for these lines of credit weigh profitability higher than other key indicators, when using working with commercial financing professionals. Contrast this with traditional bank lines of credit, which require businesses to have high and impeccable credit ratings to qualify. Having access to unsecured lines of credit can help construction contractors improve their business credit ratings, which opens the door to larger financing at lower rates and better terms.

Get Started

If you own a construction contracting company and want access to business credit lines, or if you would like to explore other business funding solutions, call Lavan Financial Group at 203-308-4547. We work with new and small businesses to understand their current financial standing, in order to provide financing options and strategies to help them achieve their goals.