Small business contractors in the construction industry are constantly looking to expand or launch new projects which require adequate working capital. Financing the business for construction companies is difficult when compared to other businesses as there are not many funding options available on the market. Banks are still reluctant to offer loans for the new projects whether it is small or big and hence many construction companies are turning to alternative financing options. The funds availed from alternative finance options is used for purchasing new tools, equipment and hiring people for temporary jobs.
The fastest and the most efficient way to avail working capital for construction companies is alternative financing. Availing traditional bank loans is not easy as qualifying for the loan need high credit score and should not have filed bankruptcy. The bank requires the business to be established in the industry for at least five years and should have healthy profit and loss statement to approve the loan.
Unfortunately, not all businesses can qualify for traditional bank loans either due to bad credit or due to the unhealthy profit and loss statement. With the alternative financing options, the small construction companies can apply to one location to find the best lender that suits their funding requirements.
There are a network of lenders on the market that are into small business funding which will speed up the process of availing working capital for construction companies. Applying for these loans and cash advances are simple and easy and are approved in as little as 24 hours of receiving the application. These non-bank lenders advance loans at a competitive fee and interest rates, and the terms can negotiate to suit the company requirements. The application for these loans can be made online and needs very less documentation which includes six months bank statements and four months of card sales statement to initiate the process.
The best ways to avail working capital for construction companies is factoring. Factoring is one of the popular and oldest types of alternative financing available for construction companies. Small business can avail working capital with this type of funding where bills receivable of the business are factored to the lender at a discounted price to avail the funds quickly.
Asset-based lending is another way to avail working capital for construction companies. The business can borrow funds on the equipment owned or lease new equipment. Funds can be availed quickly when you have collateral to pledge with the lender. The funds from collateral loan can avail quickly and is an ideal option in financial crunches and emergency situations.
Merchant Cash Advance
Merchant cash advance is the most recent and best away to avail working capital for construction companies. The business has to deal with card sales and should have an established merchant account to avail the loans. The loan approvals are based on sales history and sales forecast of the business and are repaid as a percentage of sales on a daily basis.
Alternative financing is a smart choice for funding construction companies to meet the working capital needs of the business. You need to qualify for a loan before you apply for the same. You can check online for merchant cash advance lenders that lend construction businesses or find out from your merchant card account operator advances loans to the construction companies.