---
title: "Construction Business Loans for Contractors"
url: "https://www.fundbetter.com/blog/construction-business-loans-working-capital-contractors/"
description: "Learn how contractors cover materials, payroll, and equipment between draws with working capital that funds fast and keeps bigger projects moving forward."
---

[Blog](https://www.fundbetter.com/blog/) [Industry Funding](https://www.fundbetter.com/blog/category/industry-funding/)

# Construction Business Loans: Working Capital for Contractors

 August 6, 2026 7 min read by [FundBetter](https://www.fundbetter.com/) Share

## The Contractor Cash-Flow Squeeze

Construction runs on a hard timing mismatch. Contractors pay for materials, permits, and labor long before a client releases payment. Progress draws can sit at net-30 or net-60, while suppliers and crews expect money now.

That gap is the central financial challenge across the [construction industry](https://www.fundbetter.com/industries/construction/). Managing it well is what separates contractors who scale from those who stall after one big job.

## Buying Materials Before the First Draw

Large jobs often require a heavy materials order up front. Lumber, concrete, steel, and fixtures can consume tens of thousands of dollars before you invoice a single dollar. Waiting for a deposit to clear can delay the whole schedule.

A revolving line of credit is built for this. A [business line of credit](https://www.fundbetter.com/business-loans/business-lines-of-credit/) lets you draw for a material order, repay when the draw lands, and reuse the same limit on the next job. You only pay for what you actually use.

At FundBetter, most contractors qualify with about six months in business, roughly $15,000 or more in monthly revenue, and a credit score near 500 or higher. A soft credit check lets you compare options without affecting your score.

## Turning Unpaid Invoices Into Working Capital

Net-60 terms are common in commercial work, and they tie up cash you have already earned. When several draws are outstanding at once, payroll and the next mobilization can stall, and the decision comes down to [invoice factoring versus a business line of credit](https://www.fundbetter.com/blog/invoice-factoring-vs-line-of-credit/).

Converting those receivables with [invoice factoring](https://www.fundbetter.com/business-loans/invoice-factoring/) puts cash back in your account now. You sell an unpaid invoice at a small discount and receive most of its value within a day or two. Repayment comes from your customer when they pay, so you're not stacking a monthly loan payment on top of the work.

## Financing Heavy Equipment and Trucks

Excavators, lifts, trucks, and trailers carry large price tags, and buying outright can lock up cash you need for active jobs. Renting for every project eats into margins over time, and the alternative is a term structured so that [equipment financing lets the asset pay for itself](https://www.fundbetter.com/blog/equipment-financing-to-scale-your-business/).

Spreading the cost with [equipment financing](https://www.fundbetter.com/business-loans/equipment-financing/) matches payments to the machine's working life. The equipment usually acts as collateral, which often makes approval more accessible. Owning your core fleet can also lower long-term costs versus repeated rentals.

## Covering Payroll Between Jobs

Crews need to be paid on schedule even when one project wraps and the next hasn't started. A short dry spell between contracts can threaten the team you worked hard to build. The [Bureau of Labor Statistics](https://www.bls.gov/ooh/construction-and-extraction/construction-laborers-and-helpers.htm) notes that in northern climates, cold weather frequently limits construction activity in the winter, so in seasonal trades that pressure arrives on schedule every year, which makes [managing seasonal cash flow](https://www.fundbetter.com/blog/how-to-manage-seasonal-cash-flow/) part of the payroll plan.

A [short-term business loan](https://www.fundbetter.com/business-loans/short-term-business-loans/) provides a lump sum to bridge that stretch, repaid over a few months as new work ramps up. It keeps skilled workers on your roster instead of losing them to a competitor. Specialty trades such as [heating and ventilation contractors](https://www.fundbetter.com/industries/hvac-ventilation/) use the same approach to smooth payroll between installs.

## Taking on Bigger Projects With Confidence

Growth in construction usually means larger contracts, and larger contracts demand more upfront capital. Bidding on a job you can't bankroll is risky, but turning down growth is costly too. The right funding lets you pursue scale without betting the company.

| Need | Funding tool | Why it fits |
| --- | --- | --- |
| Materials and mobilization before the first draw | Line of credit | Draw, repay when the draw lands, and reuse the limit on the next job |
| Net-60 receivables tying up earned cash | Invoice factoring | Advance most of the invoice now; your customer repays it |
| Excavators, trucks, and heavy equipment | Equipment financing | Payments match the machine's working life, and the gear is the collateral |
| Payroll during a gap between contracts | Short-term loan | A lump sum repaid over a few months as new work ramps up |

Many contractors combine tools as they grow. A line of credit handles day-to-day gaps, factoring frees up receivables, and equipment financing builds the fleet. Amounts commonly run from $5,000 to $500,000, and established firms can access up to $5M for major projects.

## Fund Your Next Project Without Stalling the Job

When a materials order, a net-60 draw, or payroll between contracts threatens your schedule, fast working capital keeps the crew moving. Tell us your monthly revenue and outstanding invoices, and we can match you with a credit line, factoring, or equipment financing. Call [786-882-2705](tel:+17868822705) or connect with [a FundBetter advisor](https://www.fundbetter.com/contact/) to see offers with a soft credit check and funding in as little as 24 hours.

## Frequently asked questions

 How quickly can contractors access funds?

After approval, money can arrive in as little as 24 hours. Invoice factoring often funds within a day or two of submitting an invoice. Faster turnaround usually depends on how quickly you provide bank statements and job documentation.

 What is the difference between a line of credit and factoring?

A line of credit is reusable capital you draw and repay against a set limit. Factoring sells a specific unpaid invoice for immediate cash and is repaid when your customer pays. Many contractors use a line for material buys and factoring to clear net-60 receivables.

 Can I get funding with a lower credit score?

Contractors often qualify with a score near 500 or higher. Lenders also weigh revenue, time in business, and the strength of your receivables. A [long-term business loan](https://www.fundbetter.com/business-loans/long-term-business-loans/) may require stronger credit, while factoring leans more on your customers' payment history.

 What can construction financing be used for?

Common uses include material purchases, permits, payroll between jobs, equipment and trucks, subcontractor payments, and bridging the gap until a progress draw is released. The right mix depends on your project pipeline and how your draws are scheduled.

## Funding mentioned in this guide

 [Equipment Financing](https://www.fundbetter.com/business-loans/equipment-financing/)[Invoice Factoring](https://www.fundbetter.com/business-loans/invoice-factoring/)[Business Lines of Credit](https://www.fundbetter.com/business-loans/business-lines-of-credit/)[Short-Term Business Loans](https://www.fundbetter.com/business-loans/short-term-business-loans/) [Construction funding](https://www.fundbetter.com/industries/construction/)[HVAC & Ventilation funding](https://www.fundbetter.com/industries/hvac-ventilation/) ★★★★★4.9 stars from real business owners Ready to apply for your business funding? Compare 8 funding options with one application and a real advisor. Funds in as little as 24 hours, no impact to your credit. [Apply Now](https://www.fundbetter.com/apply/) [or call 786-882-2705](tel:+17868822705)

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