Construction companies face a host of challenges in financing their projects that other industries never have to contend with. Not only do builders have to account for payroll for staff, leasing equipment, and repairs or upgrades to that equipment, they also have to budget to have enough equity to cover any unforeseen hangups a given project might present. In short, financing for builders can be a nightmare if you haven’t got the capital you need up front. Fortunately, here are three loan programs that are specifically tailored to the construction industry, and will get you up and moving on your next project:
Business Line of Credit
A business line of credit enables builders to purchase the raw materials on an as-needed basis. Rather than spending your personal credit card, a business line of credit operates separately and allows for greater flexibility than other borrowing options. And what you don’t spend, you don’t have to pay interest on. A business line of credit is ideal for a new business, but also can be a great asset to an established company; sometimes a short-term injection of cash is necessary to complete a lucrative project. A business line of credit can help you achieve that.
Small Business Loan
This can be tricky considering that banks are loath to approve construction companies, and even if you are approved, it could take weeks before you can access the cash you need. And builders know that time lost is money lost. Needing to get money quickly to finish a project on a deadline can make going to a bank unappealing or completely impossible for most construction companies. The good news is, there are alternative lenders who offer short-term loans for businesses to cover necessary expenses. This makes them well-suited to cover construction costs. Short-term and working capital loans are also great ways to get your business through the lean months of the construction cycle.
Commercial Mortgage Financing
Commercial mortgage financing is perfect if you’re looking to relocate or expand. Also, a commercial mortgage loan allows for construction companies to get the money they need to start on a project. If you need to redevelop a property, exploring a commercial mortgage loan may be a great alternative to applying for a loan through a traditional banking setup, or trying to get a loan from the SBA. You’re much more likely to be approved and get the capital you require in a timely fashion.
Need a small-business loan to complete your next construction project? National Business Capital understands financing for builders, and the unique challenges the industry presents. Contact the NBC team today! We have the experience and the resources to help make your next project a reality. And if you’ve tried to apply for a loan from the bank but have been denied, don’t worry. You can check out our free ebook on how to get funding when banks say no. It’ll give you the insight on how banks operate, and the options you have outside traditional bank loans!