1. The construction sector is not operating at full capacity—here are some data that could explain why
2. The Impact Of Seasonality On Construction Businesses
3. Managing Seasonality in Construction: Maintaining Profitability

There are nearly 622,000 landscaping and lawn maintenance businesses in the US, including specialties such as:

• Landscape architects and designers
• Landscape maintenance and technicians
• Interior landscaping
• Arborists and botanists
• Groundskeepers
• Heavy equipment operators, and more.

Globally, the landscaping market generated $11.46B in revenue in 2021, with a further projected increase of 0.9% in 2022. Thirty-one percent of landscaping businesses in the USA reported increases in local demand as their customers began spending more time at home in 2020, with landscape maintenance becoming the fastest growing service offering. And landscaper employment is expected to continue increasing through 2030, with an additional 8% growth projected and over 173,000 new job openings expected in 2023 alone.

As demand for landscaping services increases, so are operating costs-operating costs grew 11.9% in 2021. Along with these cost increases, supplies and materials are also becoming harder to find and labor shortages continue to impact the landscaping industry. This can lead to cash flow problems that may make it difficult for landscapers to meet increased demand and continue to grow their business.

Landscaping business loans can help landscapers of all sizes and specialties meet these challenges and continue to grow.

Long and short-term law firm funding options are available, including:

1. SBA landscaping business loans
2. Bank loans
3. Alternative funding
4. Lines of credit
5. Equipment financing

Let's take a look at each of these options.

Small Business Administration (SBA) loans are one of the most popular small business funding options. They offer the lowest rates, longest terms, and highest loan amounts, but they also have the longest application process with the most extensive paperwork requirements and the strictest eligibility criteria. You must be able to provide at least two years of detailed financial documentation, and only businesses with the strongest credit scores are approved.

SBA loans are not actually granted by the SBA-they are assessed, approved, and disbursed by partnering commercial lenders, and are simply guaranteed by the SBA up to 85% of the loan amount. This reduces the risk to the lender and, in theory, encourages them to approve more loans.

Multiple types of SBA landscaping business loans are available, including:

• 7(a) Guaranteed Loans: With loan limits as high as $5M, terms as long as 25 years, and the lowest rates available, 7(a) loans are the most popular SBA funding option. These loans typically require collateral, but have the fewest restrictions on how you can use your funding. Express loans are also available, with a turnaround time of 36 hours or less. Express loans typically don't require collateral for amounts under $25,000.
• 504 Loans: These long-term, fixed rate loans are commonly used to purchase real estate and equipment. Disbursed by community development corporations through commercial lending institutions, 504 Loans require the borrowing business to use their financing to create or retain jobs, or uphold other public policy goals such as rural development, revitalizing a business district, or supporting minority-owned businesses.
• Microloans: Available to a maximum amount of $50,000 with a maximum repayment term of 6 years, microloans can be used for working capital, inventory or supplies, furniture or fixtures, or machinery or equipment, and are available through select non-profit, community-based organizations.

Regardless of which type of SBA landscaping business loan works best for you, the application process for SBA funding is more intensive than any other lender with the strictest approval requirements. It can take weeks or months to get a decision and most applicants are rejected, especially those with low credit, seasonal businesses, businesses with a history of unstable cash flow, or those seeking short-term financing or smaller loan amounts.

Landscaping businesses may be able to access the funding they need from traditional commercial lenders like banks or credit unions, especially if they have an established relationship with their lender. Terms and rates for these landscaping business loans will be competitive, but may not be as low as the SBA and will ultimately depend on the size of the loan and your business's financial history.

Lending requirements may not be as strict as the SBA, but landscaping business loans may still be difficult to acquire from banks due to the perception of risk and factors like seasonality, lower margins, and unstable cash flow. Banks tend to prefer granting loans to larger businesses and loans for larger amounts, which can make it tough for small landscaping businesses and those looking for smaller loan amounts to get the funding they're seeking.

You may have better odds of approval if you already have a relationship with a lender, but similar to the SBA, it can take weeks or months for a bank to process a landscaping business loan application, and approval is never guaranteed.

Alternative landscaping business loans are available from direct online lenders like Bluerock Options®. Loan amounts are typically lower with shorter terms and higher rates than SBA or bank loans, but these lenders have more flexible approval requirements with faster application turnaround, making them an ideal option for landscaping businesses that may not be approved by other lenders.

Approval for alternative landscaping business loans is based on the overall health and potential of your business, with less focus on your financial history and credit score. These factors will still be considered, but they will be reviewed alongside other factors like vendor relationships, public reputation, and cash flow.

Some alternative lenders offer more traditional forms of funding like short term loans and lines of credit, while others like Bluerock Options specialize in innovative non-loan financing options like merchant cash advances.

Available from both traditional and alternative lenders, lines of credit for landscaping businesses function similarly to business credit cards but with longer terms and lower rates. Alternative lenders may have easier approval requirements than banks, but credit limits may also be lower and rates may be higher than traditional lenders.

Because lines of credit are revolving, business owners can draw and repay from the line as needed and will only ever pay interest on the amount borrowed. With no restrictions on how funds can be used, lines of credit are the most flexible form of landscaping business loan.They're typically used for covering unexpected expenses, making occasional purchases like inventory or new equipment, or managing other major expenses that don't require a larger loan but can still strain your cash flow.

Purchasing and maintaining equipment is one of the most capital-intensive aspects of running a landscaping business. Equipment financing is designed specifically to help businesses fund the purchase of new equipment, such as heavy machinery, storage equipment, and tools. The equipment or inventory acts as collateral to secure the loan, which may make this form of funding easier for newer landscaping businesses or those with lower credit scores to acquire.

Landscapers can use equipment financing to purchase small tools like hedge shears, trowls, shovels, and pruners, as well as large or heavy machinery like mowers, power washers, trimmers, vehicles, stump grinders, trailers, leaf blowers, and more. Equipment financing is also ideal for purchasing safety equipment like ear protection, gloves, and safety apparel for your staff.

The best landscaping business loan depends on how much funding you need, your financial history, your monthly sales, and how you plan to use your funding.

For short-term funding, non-loan financing such as merchant cash advances or invoice factoring can provide a quick infusion of working capital that can be used for any purpose, such as maintaining cash flow, covering unexpected expenses, hiring staff, or fueling your business's growth.

For long-term funding, SBA 7(a) loans offer the highest loan amounts, lowest rates, and longest terms, but they are the most difficult to acquire. Bank loans may have easier approval requirements, but they can still be difficult for landscaping businesses to access due to perceived risk and seasonality. If you don't meet the strict approval criteria of these lenders, alternative lenders also offer term loans, though terms may be shorter than SBA and bank loans.

For fast funding, alternative lenders are always your best choice. These lenders can approve and deposit funds in as little as one business day, while the SBA and banks can take weeks or months with no guarantee of approval.

As landscaping businesses navigate increased demand alongside labor and supply shortages, landscapers will face a number of opportunities to grow:

• New home sales: New home sales mean more opportunities for landscapers to service new homeowners. Sixty-two percent of landscaping customers are single-family residential homes, with the average homeowner spending $100-$200 per month on general landscaping maintenance, lawn care, gardening, and upkeep. Landscaping business loans can help you hire staff and market your business so that you can take advantage of this increased demand and begin building loyalty with new homeowners.
• Multi-seasonal spaces: People want to spend time outdoors more than ever, including in the winter. Landscaping businesses take advantage of this change in consumer behavior by developing and offering services that will help consumers create a functional, safe space that can be used year-round. Use funding to purchase new equipment, bid on larger projects, acquire materials, hire specialized staff to help with hardscaping and designing cold-weather spaces, or even develop new, seasonal service offerings such as holiday lighting or decoration services for Halloween or Christmas.
• Commercial demand: Demand from commercial businesses, such as malls, hospitals, and other large businesses is also increasing. Landscaping business loans can provide the working capital you need to acquire supplies and materials to bid on these projects or hire staff to handle larger projects or more clients, as well as boost your marketing so other businesses can find you and book your services.
• Infrastructure Investment and Jobs Act (IIJA): IIJA allocated $490 million to support natural infrastructure resilience and urban forests in 2022. Landscaping businesses can take advantage of this federal funding by familiarizing themselves with the process of bidding on public projects and boosting stock of native plants and trees. Use your landscaping business funding to shore up cash flow while you learn about the public bidding process or to stock up on native plants and trees for public projects.
• New services: Use landscaper funding to expand your service offering so you can up- or cross-sell other services once a project is complete. Offering new services like hardscaping, including things like construction, building fire pits, and creating accessible outdoor areas with pavilions and electric hookups for space heaters, motorized shades, and other equipment can give you a competitive edge over other landscapers who focus purely on maintenance and plant care.
• Efficient machinery: Investing in multi-purpose machinery is a great use of landscaping business funding. Machine versatility, in which one machine can handle multiple tasks, will allow landscaping businesses to improve their ROI, reduce costs associated with transporting multiple machines, and eliminate jobsite clutter. Traditional attachments like forks, trenchers, and buckets will remain popular, while stand-on skid steers and attachments for these machines like tree grapples and backhoes will grow.
• Technology: Use landscaper funding to purchase and implement landscape management software to help with quoting, scheduling, invoicing, and managing client relationships so you can work more efficiently and focus on tasks that generate revenue. You can also use landscaping business funding to implement sustainable irrigation practices with remote technology like controllers.
• Aversion to pesticides: As consumers grow more averse to pesticides, landscaping businesses will have an opportunity to develop and promote more landscape and lawn maintenance services, such as 100% manual weed removal. Landscaping business funding can help you boost your marketing so you can promote these services online or offline, generate more revenue, and stand out from your competition.
• Edible plants: 67% of adults are currently growing or are planning to grow edible plants. Use landscaping business funding to stock up on edible plants and take advantage of this increasing demand.

Landscaping business loans can also help you meet the challenges of running a landscaping or lawn maintenance business, including:

• Higher nursery input costs: The cost of seeds, containers, soil, labor, and anything else required to grow plants is up 12-14% over pre-pandemic levels, and these costs are expected to stay high-fertilizer prices are increasing 25-30% and other resources are showing a continued 5-15% increase in pricing. Landscaping business funding can provide the working capital you need to absorb these increased costs and acquire the materials you need to maintain your operations.
• Labor: Limitations to the H-2B program can make it difficult to hire workers to help meet increasing demand, and 43% of landscaping business owners worry that an ongoing shortage of quality labor will slow their growth in the next three years. Landscaping business loans like merchant cash advances can help your business hire proactively and offer competitive compensation packages that will attract new hires and retain existing staff. Learn more about how merchant cash advances can help you deal with staff shortages.
• Drought: As droughts become more common, homeowners are increasingly looking for ways to limit water use. Xeriscaping-gardening involving the use of drought-tolerant or low-water plants, practical turf, and efficient irrigation-is growing in popularity as people look to create landscapes and gardens that require less water. States across the country, especially in drought-prone areas, are also focusing on products that allow the efficient use of water; for example, nine states now require only pressure-regulating spray sprinkler bodies to be used in irrigation systems. Landscaping business loans can provide the capital you need to adjust your product and service offerings to meet these changing demands and regulations.
• Supply chain: Trouble accessing fertilizers, chemicals, plant materials, engine-powered equipment, and other essential supplies is creating challenges for landscaping businesses across the country. Material shortages are forcing landscapers to change project timelines to accommodate delays and longer times. Use landscaping business funding to maintain your cash flow during these waiting periods or to develop relationships with new suppliers so you can keep working if your usual vendors are back-ordered or out of stock.
• Seasonality: Landscaping businesses are more susceptible to seasonality than other industries, especially in cooler climates. Cash flow can suffer in the off-season, making it difficult to maintain operations and continue to grow during your busy season. Applying for landscaping business funding during your busy season when cash flow is strong can help ensure that you have cash flow available during your off-season so that you're in the best possible position next season.
• Slow paying clients: If your landscaping business services commercial clients, you may rely more heavily on invoicing clients than taking payment at the time of service. This delay in receiving payment can significantly impact your cash flow, especially as you contend with higher materials costs and supply chain challenges. Invoice factoring can help you bridge the gap between these payments so that you can maintain your cash flow and continue running smoothly.

Landscaping businesses are often considered to be "high-risk" loan applicants because of factors like seasonality, low margins, and cash flow shortages. This means applicants will have more hurdles to overcome when applying for funding from lenders like the SBA or a bank.

All lenders will require you to explain how you intend to use your landscaping business loan, as well as how you plan to pay it back. Traditional lenders will require a detailed business plan while alternative lenders are typically satisfied with a purpose statement. It's best to have this information prepared ahead of time in order to reduce any delays in receiving your funding.

Regardless of which lender or loan type you're seeking, make sure you have a firm understanding of your business's background and financials before you apply, including:

• Operating history
• Revenue and profitability
• Personal and business credit scores
• Collateral

It's also a good idea to prepare your financial statements and documentation in advance in order to reduce any wait times. Compile the following before you apply:

• Bank statements
• Profit and loss statements
• Personal and business tax returns
• Cash flow forecasts

Check out our small business loan documentation checklist for a comprehensive list of required paperwork.

As an alternative lender, Bluerock Options® can approve more landscaping business loans than traditional lenders. We can also approve loans for landscapers faster, with funds deposited in as little as 24 hours. We offer several types of landscaper funding to help grow your business, including merchant cash advances, invoice factoring, lines of credit, and more, with funding from as low as $3,000 up to $500,000.

Bluerock Options funds all landscaping and lawn care specialties. Our expert Funding Advisors will work closely with you to determine which funding option will help you achieve your goals without compromising your business's cash flow.

In the construction industry, a general contractor is the party who enters into the prime contract with the property owner. General contractors are responsible for overseeing the entire construction project, which means they need to manage several moving parts over the course of a job. These responsibilities can cause cash flow problems and many construction businesses look for general contractors loans to fill the gaps.

A construction business can be both a general contractor and a subcontractor, depending on who hires you to complete the job. For example, you're the general contractor if a homeowner hires you to replace their roof and you sign a contract directly with the homeowner. You are also the general contractor if your business is overseeing the build of a new commercial building and is in charge of hiring subcontractors to focus on specialized work, such as the electrical components, plumbing, or roofing. If you've been hired to complete specialized work by another general contractor, then you're a subcontractor.

As a general contractor, you may need additional working capital to maintain your cash flow, pay your employees and subcontractors, or finance the purchase of specific equipment, raw materials, or inventory. General contractor loans and other alternative small business loan options can provide the working capital your construction business needs to meet your current obligations and pursue new projects while you wait for clients to pay.

There are many funding options to suit general contractors, but the right funding option depends on what you need it for and your business's creditworthiness. This post will outline everything you need to know about getting a loan as a contractor, including common contractor loan and funding options.

Construction companies are often considered to be a riskier loan applicant because of seasonality, cash flow shortages, and volatility of demand. Here's what you need to know before applying for a contractor loan for your construction company:

Depending on where you're located and what type of construction you specialize in, seasonality can have a major impact on the stability of your cash flow. Weather-related delays can also affect your business's bottom line and make it harder to access funding, especially if you're seeking funding from a traditional lending institution like a bank or the Small Business Administration.

Certain types of alternative funding can help you shore up your cash flow in the off season, such as merchant cash advances and other funding options offered by direct online lenders like Bluerock Options®. These lenders have more flexible approval requirements than banks or the SBA, making more funding available to businesses that would otherwise be rejected by traditional lenders.

The construction industry is well known for having long accounts receivable periods. Some general contractors don't receive payment till as long as three months after a project is complete, which can make it very difficult for your business to take the next step forward after you complete a project. The extended length of these accounts receivable periods can have a significant impact on your cash flow, especially if you are responsible for paying subcontractors on top of your own staff and standard operating expenses.

Online invoice factoring, a form of asset purchase sometimes known as "accounts receivable financing", can help bridge the gap between issuing an invoice and collecting payment. Essentially, a business will sell their unpaid invoices to a lender, called a "factor". The factor then "owns" the invoice(s) and will advance you up to 90% of the invoice's value. The remainder of the invoice's value will be paid out to you once your client pays, minus any lender fees.

Because of factors like seasonal volatility and cash flow challenges caused by long accounts receivable periods, banks and the SBA often consider construction businesses to be higher risk, even if your business is well-established and has strong revenue.

If your construction business doesn't meet the strict approval criteria of these lenders, an alternative online lender may be a better option. These lenders have more flexible approval requirements that focus more on the future potential of your business rather than just your financial history. They also offer more flexible and innovative funding options that might actually work better for your business, such as online invoice factoring or merchant cash advances.

Traditional lenders like banks or the SBA can take weeks or months to process your contractor loan application with no guarantee of approval. Waiting to hear back from these lenders can place even more strain on your cash flow, leading to more stress and missed opportunities for your business.

With a streamlined application and more flexible approval requirements, direct online lenders can approve and deposit funds in as little as one business day, which makes these lenders the ideal option for construction businesses that need fast funding.

On public or government-funded projects, general contractors are generally responsible for providing the payment bond.

The cost of a payment bond depends on a number of factors, such as the type of bond used and the total amount of the project. General contractors will be required to pay a specific percentage of the contract amount, referred to as the "premium". The premium is based on your business's financial stability, reputation, and credit records-good credit scores typically mean lower premiums, especially on smaller projects.

Getting a payment bond is similar to getting a loan. Though the criteria will differ slightly, sureties use similar underwriting processes to vet the general contractor, including evaluating their cash flow and their ability to pay subcontractors and other parties. Demonstrating strong cash flow may improve your ability to acquire the payment bond you need to win a major new project.

General contractors are responsible for ensuring that all parties below them on the payment chain get paid, including subcontractors, laborers, and materials suppliers. This means there are more demands on the general contractor's cash flow than there are on other parties involved in a construction project.

Sometimes, you'll have to pay subcontractors, sub-sub contractors, materials suppliers, or even materials suppliers for your subcontractors or sub-subcontractors, before you get paid by your client. On top of this, collecting waivers from subcontractors, sub-subcontractors, and suppliers is often a long, manual process that can take weeks on large projects, placing even more strain on your cash flow while you wait for the project owner to pay.

Invoice factoring and other alternative small business loans can provide the cash flow your business needs to meet your financial obligations or get ready for your next project while you wait for clients to pay.

The specific application requirements for a general contractor loan will depend on the lender you are working with and what type of funding you are seeking. Typically, you will need to supply the following documents at a minimum:

• Bank statements: Bank statements provide a snapshot of your business's general cash flow. Your lender may request bank statements for as few as 3 months or up to a year or more.
• Tax returns: You may need to provide recent business and personal tax returns, especially if you're applying for funding from the SBA and traditional lenders.
• Credit history: You'll need to supply a credit report for your business, and possibly a personal credit report as well.
• Age of business: All lenders have minimum requirements for time in business, but these requirements vary by lender. Alternative online lenders may require a minimum of 6 months of operations, while the SBA requires a minimum of 2 years.
• Collateral: The SBA and most loans from traditional lenders will require collateral, while alternative lenders typically do not require collateral.

The Small Business Administration and traditional lenders have the strictest approval requirements, and will require more documentation than is listed above.

There are multiple types of funding available from both traditional and alternative lenders to help construction businesses and general contractors maintain their cash flow and continue to grow. Here's a quick overview of 6 of the most popular funding options for general contractors:

1. Term loans: With a traditional term loan, you'll receive a set amount of cash up front and the loan will be repaid in predetermined installments over a set (usually monthly) schedule. Term loans typically require collateral or a personal guarantee.
2. SBA loans: The Small Business Administration primarily offers term loans, typically with lower rates and longer terms than other traditional lending institutions. SBA loans are the hardest to acquire, with strict approval requirements and long application periods that can stretch into weeks or months with no guarantee of approval. Collateral is often required and most applicants are rejected, even with strong financial histories.
3. Equipment financing: Equipment financing is designed to fund the purchase of specific equipment, such as heavy machinery or new computers, allowing you to maintain your working capital for other expenses. The equipment acts as collateral and the financing can only be used to purchase the equipment for which the loan is being granted.
4. Business line of credit: With a line of credit, you can draw and repay from the line as needed, and you'll only ever pay interest on the amount you borrow. This makes business lines of credit a flexible financing option for when you know you'll need extra working capital, but aren't sure how much you'll need.
5. Invoice financing: Invoice factoring is a practical way to even out your cash flow while you wait for project owners to pay their invoice. This form of funding involves selling your outstanding invoices to a factoring company in exchange for 80-90% of the invoice's value up front. The remainder is paid to you (minus any lender fees) when the project owner pays.
6. Merchant cash advance: A merchant cash advance is not actually a loan-it's technically a purchase of future receivables. You'll receive a cash advance up front in exchange for a portion of your daily or weekly debit or credit card sales until the advance has been repaid. Your business must accept credit cards to qualify, so merchant cash advances are typically ideal for general contractors or construction businesses that accept payment directly from customers via credit card, and may not be well-suited for contractors who are overseeing a major construction project.

The right general contractor loan for your construction business depends on what you need the funding for and your business's financial history. As an alternative lender, Bluerock Options can approve more loans for general contractors than other lenders. We can also approve your contractor loan faster, with funds deposited in as little as 24 hours.

Read our Essential Guide to Construction Company Funding to learn more about your funding options and discover which funding is best for your business.

The construction industry is a major contributor to the country's economy, with more than 680,000 employers and over 7 million employees creating nearly $1.3 trillion worth of new structures each year across the USA.

A number of specialties fall under the general umbrella of "construction", including:

• New building construction
• General contractors
• Plumbers
• Electricians
• Remodelers and renovators
• Landscapers
• Carpenters
• Painters
• Roofers, and more.

No matter what specialty you operate in, every construction business may occasionally need access to additional working capital in order to manage unexpected expenses, shore up seasonal cash flow, or fuel new growth strategies. Working capital loans for construction businesses can be used for a number of purposes:

• To bid for a new project: Opportunities for new projects may come along unexpectedly, and you may need fast working capital up front in order to pitch new clients that will allow you to grow.
• Fill seasonal gaps: Construction businesses are among the most susceptible to inclement weather and seasonal demand, making it difficult to maintain cash flow in the off-season.
• Maintain cash flow during long billing cycles: Some clients may not pay till a project is completed. In the meanwhile, you still need to pay your employees and acquire supplies.
• Purchase raw materials needed to start a project: Raw materials can be expensive, and you may need to foot the cost until you're paid in full for completing the job.
• Open a new business: Between business formation fees, office space, inventory and equipment, and other expenses, the average start up costs for a construction company are more than $42,000. Unless you have savings to draw from, you'll need small business funding to open a new construction business.
• Expand your existing business or: Boosting your marketing campaigns and courting new business may require an investment of capital.

If you search online for "construction loans", your search results will likely feature a number of resources talking about loans designed to help property owners-not construction business owners-finance specific projects, such as building a new home or office.

Aside from these "self-build" loans, multiple types of working capital loans for construction companies are available to help construction business owners in any field and at any stage in their business's life cycle overcome challenges and continue to grow, including including long- and short-term funding, as well as secured and unsecured loans.

Here are 6 of the most common construction company loan options:

1. SBA loans for construction companies
2. Bank loans for construction companies
3. Merchant cash advances
4. Invoice financing and invoice factoring
5. Business line of credit
6. Equipment financing

Let's take a closer look at each of these options.

SBA loans for construction companies are not actually provided by the SBA. Instead, the funding is supplied by a commercial lender like a bank or credit union, and the loan is guaranteed by the SBA up to 85%. This reduces the risk to the lender and encourages lenders to offer more construction company loans.

SBA loans typically offer the lowest rates and the most favorable terms, but the business loan application process is significantly more difficult, with very strict eligibility requirements and extensive application forms that require years of detailed personal and business financial information. It can take weeks or months to process your application without any guarantee of approval, and most applicants are rejected.

The SBA offers several loans options for construction companies:

• 7(a) Guaranteed Loans: These are the most commonly sought SBA loans for construction companies. Up to $5M is available with fewer restrictions on how funds are used, longer repayment terms, and lower interest rates, and typically require collateral. The 7(a) loan program also includes Express loans, which have a turnaround time of 36 hours or less and don't require collateral for loans under $25,000.
• 504 Local Development Company Program: These are long-term, fixed rate loans that are typically used to purchase real estate or equipment. 504 loans are provided by CDCs through commercial lending institutions, requiring the borrowing business to use funding to create or retain jobs or uphold other public policy goals like supporting minority-owned businesses, rural development, or revitalizing a business district.

Bank loans for construction businesses typically offer favorable terms and rates similar to the SBA depending on the size of the loan and your business's credit history. Lending requirements are strict but may not be quite as strict as the SBA, especially if you have an existing relationship with your lender.

Similar to the SBA, it can take weeks or months for a bank to process your application, and approval is never guaranteed. Banks often prefer to grant large loans to established businesses, and typically consider the construction industry to be a high risk industry thanks to seasonal volatility and unstable cash flow. For these reasons, it can be tough for construction companies to access the funding they need from a traditional bank, especially if they're a smaller business, a newer business, or are looking for a smaller loan amount.

Merchant cash advances (MCAs) are technically a non-loan form of financing called an "asset purchase". This means that instead of providing a lump sum that is repaid over a fixed term in pre-determined instalments, your lender will purchase a portion of your future sales in exchange for an infusion of working capital up front.

MCAs are available from alternative online lenders like Bluerock Options®. These lenders have flexible application requirements that focus less on factors like credit score and financial documentation and more on the health and potential of your business. Approval can be made in as little as one business day, making MCAs ideal for construction businesses that need working capital fast.

Instead of repaying a merchant cash advance in fixed installments like a term loan, payments are automatically deducted from your daily and weekly credit and debit card sales until the advance is repaid, plus any fees. This makes MCAs ideal for businesses that process a large number of credit card transactions such as plumbers, electricians, or other consumer-facing construction businesses.

Learn more about merchant cash advances.

Invoice financing provides fast access to working capital in exchange for your business's unpaid invoices. Available through alternative online lenders as well as traditional lenders, invoice factoring is also technically not a loan-it's a form of accounts receivable financing in which you sell your outstanding invoices at a discounted price in exchange for the net amount in cash (typically between 70-90% of the invoices' value).

There are two main types of invoice financing:

• Invoice financing: You, the business owner, are responsible for collecting payment on the outstanding invoice.
• Invoice factoring: Your lender is responsible for collecting payment. Once your client pays the invoice your lender will send you the remainder of the invoice value (minus any fees).

Because the invoice acts as collateral to secure your funds, invoice factoring typically has less strict application requirements than other forms of funding, with less focus on your credit score and financial history and more on your business's revenue and other indicators of health and future potential. When you apply for invoice factoring with an alternative online lender, approval can be made in as little as one business day.

Learn more about online invoice factoring.

Business lines of credit function similarly to business credit cards, but with longer terms and lower rates. Unlike a lump sum of funding like an SBA 7(a) loan or a merchant cash advance, business lines of credit provide a maximum credit amount from which funds can be drawn and repaid as needed.

Available from both traditional and alternative online lenders, business lines of credit offer the most flexibility by allowing you to draw and repay with no restrictions on how the funds are used. You'll only ever pay interest on the amount you borrow. Payments are typically monthly and will cover both the interest and the principal.

Lines of credit can be secured or unsecured depending on the strength of your application and the credit limit you're seeking. They can also be based on fixed or revolving terms. With a fixed line of credit, the term length is set in advance and will not reset when you repay the balance; with a revolving line of credit (also called an open-ended line of credit), your credit line will reset when you pay the balance in full.

Their flexibility makes lines of credit ideal for managing a number of expenses unique to construction businesses, including:

• Responding to unexpected emergencies
• Restocking raw materials
• Purchasing new equipment or technology
• Bidding for new jobs
• Shoring up seasonal cash flow
• Other major expenses that don't require a loan but which may drain your cash flow

Equipment financing is a special form of construction company funding designed to help fund the purchase of expensive construction equipment, such as bulldozers, lifters, excavators, loaders, forklifts, and any other heavy machinery or costly equipment. The lender will typically supply 80-100% of the cost of the equipment, with the equipment serving as collateral to help secure the loan.

Funding from an equipment financing loan can only be used to purchase the specific equipment it's being sought for, but because equipment financing is secured, it typically has lower rates than other forms of construction company funding. Equipment financing is repaid in regular instalments, typically monthly, with the term length dependent on how long the lender anticipates the equipment will last.

The right construction company funding depends on a number of factors, such as how much funding you need, why you are seeking funding, and your business's age and financial history.

Bank and SBA loans for construction companies typically offer the best rates and terms, but the application process for these loans is extensive with very strict requirements that exclude most business owners. As an alternative lender, Bluerock Options can approve more working capital loans for construction companies in as little as 24 hours. We provide several types of small business funding to help grow your construction business, such as merchant cash advances, invoice factoring, and business lines of credit, with funding from as low as $3,000 up to $500,00 available.

We fund businesses in all construction specialties. Our expert Funding Advisors will work closely with you to determine which funding option will help you achieve your goals without compromising your business's cash flow.

The construction industry is a major contributor to the country's economy, with more than 680,000 employers and over 7 million employees generating nearly $1.3 trillion worth of structures each year in the United States.

Whether you're looking to open a new business, bid for a new project, fill seasonal gaps, or expand your existing construction company, construction businesses of all sizes and specialties can benefit from an infusion of working capital.

Small business funding is available for remodelers and renovators, contractors, electricians, plumbers, HVAC technicians, landscapers, specialty tradespeople, and all other construction specialties. Funding can be used to help you overcome the challenges unique to running a construction business, such as:

• Seasonality: Construction businesses are among the most susceptible to unexpected weather and seasonal demand fluctuations. It can be difficult for these businesses to maintain stable cash flow, especially in the off-season.
• Supplies and materials: Your business may incur significant expenses purchasing necessary supplies and materials to bid for new projects or before you're paid in full for completing a job.
• Billing cycles: Clients may not pay till the project is completed. In the meantime, you still need to pay your employees and acquire supplies to complete their project.
• Bidding for business: Opportunities to bid for new projects may come along unexpectedly, and you may need working capital up front to pitch new clients that will allow you to grow.

Most "construction loans" are designed to help property owners (not construction business owners) finance specific projects, such as building a new home or office. Aside from these "self-build" construction loans, multiple types of funding are available to help construction businesses overcome challenges and continue to grow, including long- and short-term funding, as well as secured and unsecured loans. In this guide, we'll take a look at 5 types of construction company loans:

1. SBA loans
2. Bank loans
3. Alternative funding
4. Lines of credit
5. Equipment financing

Let's take a closer look at these options:

SBA loans are not actually provided by the Small Business Administration-instead, your funding is supplied by a commercial lender like a bank or credit union, and the loan is guaranteed by the SBA up to 85%. This reduces the risk to the lender and encourages lenders to fund more small businesses.

SBA loans have the lowest rates and best terms, making them the preferred loan for many small businesses, including construction companies. However, the application process for SBA funding is significantly more difficult than other forms of construction company funding, with strict eligibility requirements and extensive application forms that require years of detailed personal and business financial information. It can take weeks or months to process your application with no guarantee of approval. Most applicants are rejected, especially those with low credit, a history of unstable cash flow, or those seeking a short-term loan.

SBA loans are available to both start-up and existing small businesses. Several SBA loan options are available, but there are typically two types of SBA loans that are ideal for construction companies:

• 7(a) Guaranteed Loans: These are the most commonly sought SBA business loans for construction companies. 7(a) Guaranteed Loans up to $5 million are available with fewer restrictions on how funds are used, longer repayment terms, and lower interest rates. These loans typically require collateral and follow similar guidelines to standard term loans. This program also includes Express loans, which have a turnaround time or 36 hours or less and generally don't require collateral for loans under $25,000.
• 504 Local Development Company Program: 504 loans are long-term, fixed rate loans that are typically used to purchase real estate or equipment. These loans are provided by CDCs through commercial lending institutions and require the borrowing business to use the funding to create or retain jobs or uphold other public policy goals, such as supporting minority-owned businesses, rural development, or revitalizing a business district.

Commercial banks and credit unions also offer construction company funding. Terms and rates are competitive but are not as low as SBA-guaranteed loans, and will typically depend on the size of the loan and your credit history. Lending requirements are strict, but may not be as restrictive as SBA loans, especially if you have an existing relationship with your lender. However, similar to SBA loans, it can take weeks or months to find out if your bank loan application has been approved, and approval is never guaranteed.

Because of seasonal volatility and often unstable cash flow, commercial lending institutions often consider construction businesses to be a higher risk industry. In addition, banks typically prefer to grant loans for larger amounts or loans to large, established businesses. For these reasons, it can be tough for construction businesses to acquire funding from a bank, especially for smaller businesses or companies looking for smaller loan amounts.

Alternative funding from direct online lenders like Bluerock Options® is easier to acquire than SBA or bank loans for construction companies. Rates are higher than these traditional forms of funding, but with flexible lending requirements and less focus on factors like credit score, alternative funding is often the best option for construction companies.

Alternative lenders base your approval on the health of your business and are more lenient with credit records and financial documentation. They are also more likely to lend to newer businesses, though some will not lend to start-ups or businesses in operation for less than 6 months. Approval can be made in as little as 24 hours, making alternative funding an ideal choice for construction businesses that need fast funding to take advantage of an opportunity to bid on a big project or cover unexpected cash flow shortfalls.

Multiple types of short- and long-term funding are available depending on your medical practice's needs, including lines of credit, alternative small business loans, and real estate collateral loans, as well as non-loan financing such as merchant cash advances and invoice factoring, typically with no limits on how you use your funding.

Business lines of credit function similarly to business credit cards but with longer terms and lower rates, and are available from traditional banks as well as alternative lenders.

This type of construction company funding offers the most flexibility, allowing you to draw from and repay the line of credit whenever you need with no restrictions on how funds are used. You'll only ever pay interest on the amount you borrow. This flexibility makes lines of credit ideal for responding to unexpected complications like repairing equipment or restocking raw materials, purchasing new equipment or technology, bidding for new jobs, shoring up cash flow during seasonal dips, and other major expenses that don't require a larger loan but which can still strain your cash flow.

Equipment financing is designed to help fund the purchase of expensive construction equipment, such as bulldozers, lifts, excavators, loaders, forklifts, and more.

With this type of financing, your lender will typically supply 80-100% of the cost of the new equipment. The equipment serves as collateral to secure the loan, so equipment financing typically has lower rates. You'll repay the loan in regular instalments, typically monthly, with the term often dependent on how long the lender anticipates the equipment will last.

The best construction company loan depends on your goals. Your funding, including the amount you borrow and your repayment terms, should always serve a specific purpose that aligns with your business's goals, such as purchasing new equipment, acquiring raw materials to complete a project, financing a bid for a new project, or boosting your marketing campaign.

For short-term funding, non-loan forms of financing such as merchant cash advances or online invoice factoring can provide a quick infusion of working capital. These types of short-term financing can be used to fill in cash flow shortages during the off-season or while you wait for clients to pay after a project is completed, as well as for things like investing in marketing your business or kickstarting your growth by giving you the funds you need to bid for new projects.

For long-term funding, SBA 7(a) loans offer the best rates and terms, but are the most difficult to acquire. Bank loans may be a good alternative, but can also be difficult for construction businesses to acquire because of cash flow volatility. If neither of these options are available to you, alternative lenders also offer long-term funding like small business loans or collateral business loans.

For fast funding, your best bet is always an alternative lender. These lenders can approve and deposit funds in as little as 24 hours, while SBA and bank loans can take months with no guarantee of approval.

Construction company funding can help construction businesses in all specialties overcome the unique challenges of their field, including:

• Seasonality: Many construction businesses, especially those that operate primarily outdoors, experience seasonal lows during the winter months, while those that can still safely operate have to manage the challenges associated with winter weather. Despite seasonal lows, fixed expenses still need to be paid and can put a strain on your business's cash flow.
• Equipment: Construction businesses require expensive equipment for their jobsite and their office. It can be difficult to afford these items when starting up a new business, and repairs can also be costly.
• Raw materials: Raw materials are essential for pitching, starting, and completing jobs on time, but they require significant up-front investment.
• Weather: Inclement weather can create delays that are completely beyond your control, extending project timelines and increasing costs.
• Labor shortages and high employee turnover: Construction workers are retiring faster than the younger generation can replace them. Offering incentives or benefits can help attract younger workers and cement loyalty with existing employees.
• Cash flow: Cash flow for construction businesses can be stressed when you're dealing with seasonal fluctuations and late or slow-paying clients. Short-term financing like invoice factoring can help bridge the gap between payments.
• Safety: The construction industry leads all industries in the total number of workforce deaths. Injuries sustained on the jobsite can also lead to significant losses in productivity and wages. Regular and ongoing training is the best way to keep employees safe on the jobsite, but creating and implementing these programs can strain your cash flow.
• COVID-19: The COVID-19 pandemic halted many new construction projects, restricting firms to working only on projects already in progress and further stressing cash flow.

Construction company funding can be used for more than navigating the challenges faced by construction businesses-it can also be used to grow or expand your business, such as:

• Hiring staff: Expand your team or hire subcontractors so you can take on more projects, bid for larger projects, or offer more comprehensive services.
• Bidding for bigger projects: Upgrade your equipment, hire workers, or take on subcontractors so you can bid on bigger projects and compete with larger companies in your area.
• Expanding your facilities: Build a new office, renovate your existing space, or move to larger facilities to support your business's growth.
• Boosting your marketing: Advertise your business, create or update your website, or use direct marketing to reach new clients, especially if you've taken on more staff or expanded your services to attract larger projects.
• Embracing technology: Building Information Modeling (BIM), telematics, and emerging technologies like virtual reality or augmented reality, robots and drones, 3D printing, connected devices, and autonomous vehicles can help construction businesses improve communication, productivity, and safety.

Construction companies are often considered to be a riskier loan applicant because of seasonality, cash flow shortages, and volatility of demand. Here's what you need to know before applying for funding for your construction company:

• Typical revenue and billing models for construction businesses-getting paid once a job is complete, for example-can result in inconsistent cash flow even if your revenue is strong throughout the year, which can make it difficult to get approved for construction company funding. Requesting partial payment up front to cover raw materials expenses, billing clients quickly, offering discounts for early payment, and making it easier for clients to pay can all improve your cash flow.
• Construction businesses are particularly susceptible to economic fluctuations. Combined with seasonality, this volatility can make these businesses seem riskier to lenders.
• If you're applying for a loan to finance a specific project, you may be asked for details about the project, including specific and detailed building plans, construction contracts, and cost estimates. You may even need to work with an appraiser to analyze your project and compare it against other similar projects in your area.

The steps you'll follow when applying for a construction company loan will be similar to other industries.

Learn more about how to apply for small business funding

Get the construction company funding you need

As an alternative lender, Bluerock Options® can approve more construction company loans than traditional lenders. We can also approve your construction company funding faster, with funds deposited in as little as 24 hours. We provide several types of small business funding to help grow your construction business, with funding from as low $3,000 up to $500,000.

Bluerock Options® funds all construction specialties. Our expert Funding Advisors will work closely with you to determine which funding option will help you achieve your goals without compromising your business’s cash flow.