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Business Loans & Financing For Construction Companies

Do you need a construction business loan to help support the growth of your business? If so, the good news is that you have plenty of options. Below we have compared some of the top lending options to help you make an education decision. 

What is a construction business loan?

Construction projects can have a hefty price tag for the customer as well as the builder or construction company. A construction business loan can provide a more affordable option to finance the direct costs associated with building projects.

How do you finance a construction project?

Financing a construction project can be simplified using primerates.com. Simply visit primerates.com and fill out your application. Within minutes you will be connected to multiple lenders that can potentially provide the money you need!

Do you need a downpayment for a construction loan?

An average minimum down payment of 20% – 25% can be expected with most construction loans. Depending on the type of loan you may be required to use collateral instead of a cash down payment. It’s important to do your research and select the loan that works best for your situation. 

What are the requirements for a construction business loan?

Different lenders and loan types can have varying requirements for a construction business loan. Prior to applying you should gather your income and tax records. In addition, you should prepare documentation showing the legitimacy of your business. Taking these steps can help speed up the approval process and increase your chances of approval. 

Is a construction business loan a good idea?

A construction business loan can be a good idea as long as it’s managed properly. It can allow your business to grow and revenues to increase quickly. 

Pros

  • Allows you to buy your own equipment
  • Complete more projects, earn more revenues
  • Affordable payment plans
  • Expand your company faster

Cons

  • Taking on debt 
  • Interest and fees 

Options for Financing Your Construction Business

SBA Loans

Small Business Administration (SBA) is a government resource than can provide construction business loans. 

Pros

  • Very accessible for securing capital 
  • Helps business without collateral
  • Works with startups
  • Lower monthly payments
  • Longer loan maturities
  • Typically structured without balloon payments
  • Lower down payments

Cons

  • Higher interest rates
  • More paperwork
  • More time required for documentation and approval process
  • Longer funding time
  • Loans often secured with any property owned by business owner
SmartBiz
Loan Amount:$30,000 – $350,000
APR Range:9.7% – 11.04%
Time To Fund:Typically take several weeks to fund, but can fund as quickly as within seven days.
Loan Term:Maximum loan term is 10 years.
Origination Fee:4.00%
How To Qualify:675+ Personal credit score
$50,000+ Annual revenue
Great Option For:Borrowers with good credit
SBA loans
Funding real estate purchases
Refinancing debt
Credit Check?Soft credit check and hard pull
Co-Applicants Accepted?No cosigners
Direct Pay-Off To Creditors?No
Click “Check Rates” to apply to SmartBiz

» MORE: SmartBiz SBA Loan Review

Revenue-Based Financing

Revenue-based financing can be helpful to startups or unproven business models that need funding. Revenue-based financing can allow companies to promise an agreed upon percentage of future revenue. 

Pros

  • No company equity required
  • Significant investor funding
  • Payments based on percentage of monthly revenue
  • Receive money upfront
  • Faster approval time

Cons

  • Must have business portfolio prepared
  • Minimum requirements may be difficult to meet
  • Lack of regulation
  • Some lenders can impose high interest rate
FundBox
Loan Amounts$1,000 to $100,000
APR Range10.1% to 79.8%
Repayment Terms3 to 6 months
Time to FundingA few minutes to several days
Annual Revenue$50,000+
Click “Check Rates” to apply to FundBox

» MORE: FundBox Business Loan Review

Line of Credit

Construction companies can take advantage of credit lines offered by financial institutions. A line of credit can be used for various purposes by the borrower. 

Pros

  • More permanent funding solution
  • Money can be drawn at anytime up to agreed upon limit
  • Ideal for balancing cash flow
  • Only pay interest on the amount you use
  • Improves business adaptability
  • Builds business credit

Cons

  • Pay-as-you-go format means fees can add up quickly
  • Difficult to qualify for
  • Low borrowing limits compared to other options
  • Risk for misuse of loan
StreetShares
Loan Amounts$2,000 to $250,000
APR Range24.00% to 99.00%%
Repayment TermsUp to 3 years
Time to FundingTypically 1 – 5 days
Click “Check Rates” to apply to StreetShares

» MORE: StreetShares Business Loan Review

Commercial Loans

New business endeavors are commonly funded by commercial loans. They can be a good option for small construction business that need funding. 

Pros

  • Lower interest rates
  • Flexible options
  • Long-term loans often between 3 – 10 years
  • Extended payment plans
  • Large sums of money
  • Unsecured, no collateral required in most cases
  • You retain ownership of company

Cons

  • Challenging to qualify for funding
  • Excellent business credit typically required
  • Personal financial history required
  • Less autonomy than other options
Funding Circle

Funding Circle is another peer-to-peer lending option that highlights credible investors and over $7 billion dollars invested. 

Pros

  • Quick online application
  • Secured loans
  • Transparent terms
  • Backed by more credible investors
  • Use loan proceeds for almost any business purpose

Cons

  • Lien on business assets required
  • Personal guarantee from owners required
Loan Amount:$25,000 – $500,000
APR Range:4.99% – 26.99%%
Time To Fund:10 days on average
Loan Terms:Up to 5 years
How To Qualify:620+ Personal Credit Score
No Minimum Annual Revenue
Great Option For:Established Businesses – 2+ years in business, Not Sole Proprietors
Click “Check Rates” to apply to Funding Circle

» MORE: Funding Circle Business Loan Review

SmartBiz
Loan Amount:Up To $5 Million
APR Range:Up to 11.04%
Time To Fund:Within 45 days
Loan Term:25 Yrs
How To Qualify:675+ Personal Credit Score
$250,000+ Annual Revenue
Great Option For:Borrowers With Good Credit
SBA Loans
Click “Check Rates” to apply to SmartBiz

» MORE: SmartBiz SBA Loan Review

Peer-to-Peer Lending

Person-to-person or peer-to-peer lending is an online lending option that connects borrowers and lenders. 

Pros

  • Generous loan amounts 
  • Easy and quick online application process
  • Fixed interest rates and payments
  • No prepayment penalty
  • Unsecured loans, no collateral required

Cons

  • More ideal for good credit borrowers
  • Bad credit borrowers can receive high interest rates
  • No government insurance or protection
  • Some jurisdictions don’t allow p2p lending
LendingClub

LendingClub is a peer-to-peer lending giant that offers fast-approved loans with reasonable interest rates. 

Pros

  • Clear terms outlined prior to signing up for a loan
  • Well established pattern of service
  • 36- or 60-month terms
  • Information easily accessible on their website
  • Receive pre-approved offer in minutes
  • Easily apply online
  • Loans usually funded in less than 10 days
  • Competitive interest rates between 6 to 30 percent
  • Nationwide availability for most types of credit

Cons

  • Application process may require copies of tax documentation
  • Passes accounts into collection quickly after missed payment
  • Unsecured loans only
Loan Amount:$5,000 – $300,000
APR Range:9.8% – 35.7%
Time To Fund:As quick as 2 days
Loan Term:One to five years
How To Qualify:600+ Personal Credit Score
$75,000 Annual Revenue
Great Option For:Good Personal Credit
Works With All Entities Including Sole Proprietors
Click “Check Rates” to apply to LendingClub

» MORE: LendingClub Business Loans Review

Upstart

Upstart is a peer-to-peer lending option that can offer funding for construction business loans. Upstart can be differentiated by its unique approval process that considers factors other than just your credit score.  

Pros

  • Good chance of approval
  • Quick funding
  • Competitive interest rates between 9.57% – 29.99%
  • Generous loan amounts between $1,000 – $50,000

Cons

  • Some states have minimum loan amount
  • Fees can be costly
  • Prepayment penalty can apply
APR range5.99% – 35.89%
Available loan terms36 – 60 months
Loan amounts$1,000 – $50,000
Time to fundOne business day
Origination fee0% – 8%
Credit needed620+
Income neededN/A
Soft Credit Check?Yes
Best forNew Borrowers, Borrowers With Thin Credit, Fair Credit
Click “Check Rates” to apply to Upstart

Prosper

Founded in 2005, Prosper was one of the very first peer-to-peer lending marketplaces within the United States. 

Pros

  • Fixed terms (2-year and 5-year option)
  • No early payment penalties
  • No minimum income requirement
  • No hidden fees
  • Easy application process

Cons

  • Minimum credit score of 640
  • Payment schedule cannot be adjusted
  • Maximum loan amount $35,000
APR range:6.95%—35.97%
Available loan terms:36-60 months
Loan amounts:$2,000—$40,000
Time to fund:One day
Origination fee:2.41%–5%
Credit needed:620+
Income needed:Varies
Soft Credit Check?Yes
Best for:Those with a steady income
Click “Check Rates” to apply to Prosper

Conclusion

Ready to take your business to the next level using a construction business loan? Submit one loan application at primerates.com and get connected to multiple lenders within minutes. Primerates.com allows you to receive more competitive offers, easily compare lenders, and save hours of time. Ready, set, save and apply today at primerates.com.

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DISCLAIMER
See the online credit card applications for details about the terms and conditions of an offer. Reasonable efforts are made to maintain accurate information. However, all credit card information is presented without warranty. When you click on the “Apply Now” button, you can review the credit card terms and conditions on the issuer’s web site.

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The offers that appear on this site are from third party advertisers from which PrimeRates receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). PrimeRates strives to provide a wide array of offers, but our offers do not represent all financial services companies or products.

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