| Takeaway | What It Means |
| 🏗️ Built for Project Timing | Construction loans are structured around draw processes and staged draws, so funds arrive as a project reaches milestones rather than as a single upfront lump sum. |
| 🔀 One Application, 80+ Lenders | United Capital Source is a business funding marketplace. You apply once, and we match your file across 80+ lenders, so a decline by one construction lender does not send you back to the start. |
| 💳 Lines Versus Lump Sums | A revolving line of credit covers recurring gaps between draws, while a term loan or an SBA 504 loan funds a single large build-out or a piece of equipment. |
| 📉 Fair FICO Has a Path | Revenue based and equipment financing options in the network start at a 475+ FICO floor for companies with strong, consistent monthly deposits. |
| 🏦 SBA 504 for Owned Property | SBA 504 loans fund buildings, land, and long-life equipment up to $5.5 million, but by rule, they cannot pay for payroll, working capital, or day-to-day inventory. |
| ⏱️ Speed When It Counts | Many construction loans in the network fund within 1 to 3 business days, with same day capability available for qualified files. |
| 🧾 No Universal 20 Percent Down | Lines of credit, revenue based financing, equipment financing, and invoice factoring require no down payment, unlike most bank construction loans. |
| 📍 Nationwide Coverage | UCS facilitates business construction loans in all 50 states, with specialists who understand how contractor cash flow actually works. |
| Signal | Detail |
| Funding range | $1,000 to $10,000,000 across the network, depending on the product |
| Credit floor | As low as 475+ FICO (equipment and revenue based); 550+ for term loans; 675+ for SBA |
| Approval speed | 1 to 3 business days; same day capability for qualified files |
| Commercial construction loan rates | Roughly 5% to 13%; SBA-backed options start near Prime + 2.75% |
| Down payment | 10% to 30% on bank and SBA construction loans; $0 on lines, factoring, and MCA |
| Documentation | Bank statements, tax returns, and financial statements; plans and a budget for build loans |
| Network | 80+ lenders reached through a single application |
Construction companies get paid in stages, but they spend continuously. Payroll, materials, permits, and equipment all come due before a project owner releases the next progress draw. That timing gap is the main reason contractors and builders seek business loans, even during a busy year with steady projects.
Construction business loans is an umbrella term rather than a single product. These business construction loans include business lines of credit, term loans, equipment financing, invoice factoring, SBA loans, permanent mortgages, and construction-to-permanent loans, each suited to different projects. The right choice depends on what you are building and how quickly you need the money.
Since 2011, United Capital Source has helped over 40,000 businesses access more than $1.6 billion in financing nationwide. As a full-service business funding marketplace, we do not lend our own money; we match your file across a network of 80+ lenders and guide you from application through financing. With 1,600+ five-star reviews on Trustpilot and Google, our job is to find the construction financing that fits, not to sell a single product.
Construction business loans are financing products that fund labor, materials, and equipment, as well as cash flow gaps, for construction projects. They are not one loan type. The business construction loans category spans several products, from a revolving line of credit to a long-term SBA loan, and each construction loan is suited to a different stage of a project.
What sets construction financing apart is timing. A general contractor may cover a month of subcontractor bills, fuel, and materials before the project owner releases the next draw. A small business builder feels that squeeze most, because a single late invoice on a large project can stall payroll on every other job.
United Capital Source approaches business construction loans as a marketplace rather than a single lender. When you apply, a specialist reviews your company and matches it against the lenders in our 80+ lending network that actually fund construction work, so you compare real construction loans instead of guessing which lender to call first.
Small business loans for a construction company can take the form of:
Construction businesses can choose among roughly seven financing options, each fitting a different construction project. Matching the product to the use of funds is where most borrowers save the most money.
Business lines of credit work as a revolving facility you draw on as needed, so they suit recurring gaps between draws; you pay interest only on what you use, with lines ranging from $1,000 to $1,000,000. A business term loan provides a single lump sum for a defined build-out or purchase, ranging from $5,000 to $10,000,000. Equipment financing uses the machine as collateral and requires a minimum FICO score of 475. It finances excavators, cranes, and trucks up to $10,000,000 per piece, often over a term matched to the asset’s useful life.
For the wait between finishing a job and getting paid, invoice factoring and accounts receivable factoring advance roughly 75% of an unpaid invoice within days, on facilities from $10,000 to $25,000,000. Construction companies with strong deposits but a lower score often turn to merchant cash options or revenue based financing, which are underwritten on sales rather than personal credit scores.
Two options are built around real estate. SBA loans include the7(a) program for working capital and equipment and the 504 program for owner-occupied property; the 504 program covers up to 90% of project costs through a bank-and-CDC structure, up to $5.5 million, and is administered by a certified development company. A Georgia commercial builder recently secured a $250,000 SBA 504 loan for a new equipment yard, including buildings and land, with a 10% owner contribution and the CDC portion fixed for 20 years.
Construction-to-permanent loans fund the build through a draw process and then convert to a commercial mortgage at completion, avoiding a second closing. Commercial mortgages and commercial construction loans also cover new-build work on an existing property or a new building, so the same company can grow from a small renovation into a full commercial project without switching partners.
Most construction loans release money in stages tied to project milestones, not in a single upfront lump sum. This structure, a draw schedule, keeps financing costs aligned with on-the-ground progress.
As each construction phase reaches completion, the lending partner typically inspects the work before releasing the next draw. During the build, many construction loans require interest-only payments on the amount drawn so far, which keeps early costs low. Upon completion, the loan is either repaid with a balloon payment or converted to longer-term financing, such as a permanent mortgage.
How much you can borrow depends on the project. Lenders generally finance 70% to 90% of total project costs, with the borrower covering the rest through a down payment. Depending on the deal, the building or the equipment may secure commercial construction loans, and some lines are available unsecured for established borrowers with strong financials. However, an unsecured line usually carries higher interest rates.
Before any application reaches an underwriter, our specialists package the file and pre-qualify it against the lenders most likely to approve it, so a company does not waste an application on a partner that was never going to fund a contractor at your stage. That pre-qualification step is the practical core of the process, and it is why comparing construction loans through the network beats applying to one lender at a time.
Construction companies most often borrow to bridge the gap between project spending and payment. The specific uses tend to repeat across trades. A Suffolk County drywall contractor draws $40,000 from a revolving business line to pay subcontractors and complete the framing upfront, then repays the line about 30 days later when the general contractor’s progress draw clears.
A Texas concrete company waiting on a $120,000 municipal progress payment uses invoice factoring to receive roughly $90,000 within two business days instead of waiting 45 days for the check. An Ohio general contractor takes out a $30,000 short term working capital loan during the slow winter season to keep a small business crew of six on payroll, then repays the balance over spring and summer once the last project is complete.
Beyond cash flow, companies use financing to cover construction costs and buy materials in bulk before prices rise, to invest in construction equipment and new technology, including for housing and renovation work, to cover permits and mobilization costs, and to expand and take on a larger project than current reserves would allow. Each of these is a case where the right construction loan allows a business to expand and complete more work rather than turn jobs away, and where the ability to expand on schedule protects future profits.
| FUNDING TYPES | MAX AMOUNTS | STARTING COSTS | SPEED |
|---|---|---|---|
| Merchant Cash Advances | $5k – $5m | Starting at 1-6% p/mo | 1-2 business days |
| SBA Loan | $50k - $10m | Starting at Prime Rate + 1% | 4 -12 weeks |
| Business Term Loan | $5k - $10m | Starting at 1-4% p/mo | 1-3 business days |
| Business Line of Credit | $1k - $1m | Starting at 1% p/mo | 1-3 business days |
| Receivables/Invoice Financing | $10k - $25m | Starting at 1% p/mo | 1-2 weeks |
| Equipment Financing | Up to $10m per piece | Starting at Prime Rate + 3.5% | 3 -10+ business days |
| Revenue Based Financing | $10K – $5m | Starting at 1-6% p/mo | 1-2 business days |
Commercial construction loan rates generally run from about 5% to 13%, with SBA-backed options starting lower, near Prime + 2.75%. Your interest rates depend on personal and business credit, revenue, the loan term, the collateral, and the Federal Reserve’s prime rate, so the range is wide by design. Borrowers with strong financials see low interest rates, while thin files see higher interest rates.
The down payment is where construction financing is widely misunderstood. Bank and SBA construction loans often require 10% to 30% down, but a line of credit, revenue based financing, equipment financing, or construction invoice factoring requires no down payment at all. Common fees include origination, appraisal, and closing costs, which vary by lender and product, and repayment terms range from a few months to several years.
Worked examples make the cost concrete. A $50,000 business term loan at about 12% over 36 months comes to about $1,660 per month. A $100,000 term loan at about 10% over 60 months comes to about $2,125 per month. A $300,000 construction loan structured as interest-only during a 12-month build at 9% runs near $2,250 a month while you build, with the principal due or converted at completion.
These figures are illustrations, not quotes. The exact payment depends on the lender we match you to, which is why we surface competitive rates from across the network and show the full price before you commit, rather than opening with a single headline rate.
The 20% down myth: You do not always need 20% down. Bank and SBA construction loans may require 10% to 30%, but lines of credit, revenue based financing, equipment financing, and factoring can fund with nothing down.
Qualifying for a construction loan comes down to credit, revenue, time in business, and the documents that prove them. Requirements vary by product, which is the advantage of comparing several at once.
Across the network, financing can start with FICO scores as low as 550, annual revenue around $75,000, and six months in business, though stronger files unlock better terms. Bank and SBA construction loans set a higher bar: good personal credit typically means a score of 690 or higher, and lenders often want a debt service coverage ratio of 1.25 or better. Most lenders also ask for bank statements, tax returns, financial statements, proof of insurance, and a balance sheet, plus plans and a budget for a build.
A lower score does not close the door. A Florida roofing business with a 585 FICO but $80,000 in monthly deposits financed a $65,000 crane through a revenue based path at the 475+ network floor, because that underwriting weighs deposit consistency over personal score.
Larger requests are harder. A $1,000,000 loan usually requires multiple years in business, strong financials, and often collateral or an existing property to secure the debt, but it is approvable for an established company with a track record. Banks and credit unions may decline these files on credit alone; banks, credit unions, and online lenders each weigh the same construction project differently, which is exactly why comparing them matters.
The main advantage of a construction loan is control over timing: you can pay crews and buy materials before a draw clears, take on bigger construction projects, and keep commercial construction work moving without draining reserves. Matching the product to the need also lets a company borrow only what a project requires.
The trade-offs are real. Business construction loans can cost more than a standard bank term loan; builder loans often require a down payment and detailed plans; and repayment on a fixed schedule can strain a business when receivables are unpredictable. A line you never draw costs little, but a lump-sum loan taken before you have the work to support it is a poor fit. The honest answer is that the right commercial construction loan structure depends on your project and your cash flow, which is exactly the comparison we help you run.
| Pros | Cons |
| Pay crews and buy supplies before a draw clears | Often pricier than a standard bank product |
| Take on bigger jobs without draining cash reserves | These products usually need cash down and detailed plans |
| Borrow only what a project requires | Fixed monthly bills can strain uneven receivables |
| Cash in hand in one to three days on many options | A lump sum taken before the work exists is a poor fit |
Applying for a construction loan through United Capital Source requires a single application and about 5 steps. You apply once, and we take the file to the lenders, not the other way around.
This is the practical meaning of One Application, 80+ Lenders. If one lender declines your file, we already have it packaged and ready to move to the next best-fit partner, so you never restart paperwork or retell your story from scratch.
You submit a short online application with basic details about your company and the project. There is no lengthy document package to assemble upfront.
A specialist reviews your profile and, with our proprietary matching technology, pinpoints best-fit options in the network for your situation.
We package your file and submit it on your behalf, so you deal with a single point of contact instead of filling out multiple separate applications.
We coordinate approval and the release of funds, often within one to three business days once your file is complete.
We stay your partner after the deal closes, so when your business grows and needs capital again, your history is already on file.
| “Most contractors come to us sure they need one specific loan, and once we look at how their draws and receivables actually move, the right answer is often a different product entirely. Our job is to find that fit across the network, not to sell whatever is easiest to close.”
— Jared Weitz, CEO and Founder of United Capital Source |
A decline from one lender is not the end of your options. Because United Capital Source works across 80+ lenders, a business construction loan that one lender passes on is re-submitted to the next best-fit partner, using the package we already built.
If credit is the obstacle, several paths remain. Revenue based financing and equipment financing reach a 475+ FICO floor when deposits are strong. A business credit card can cover smaller material purchases while you build history. Improving your profile over a few months, which is different from credit repair, can help you qualify for lower interest rates and better terms next time.
If you own the building or land, using the property as collateral or securing a refinance can also unlock capital. The goal is to fund the work now while positioning your construction company for a lower cost later.
It depends on the structure. A $300,000 construction loan set up as interest-only during a 12-month build at about 9% runs near $2,250 a month while you build, with the principal due or converted to a permanent mortgage at completion. An amortizing loan would carry a higher monthly payment but pay down principal as you go.
Not always. Bank and SBA construction loans often ask for 10% to 30% down, but a revolving business line, revenue based financing, equipment financing, and invoice factoring require no down payment at all. The right structure depends on the construction project.
Yes. A small business and an LLC regularly qualify for construction loans. Financing in the network can start with FICO scores as low as 550, annual revenue around $75,000, and six months in business, with stronger files earning better terms.
A $1,000,000 loan is harder to obtain than a small credit line and usually requires multiple years in business, strong financial statements, and collateral. It is achievable for a small business or an established construction company with a track record, and an SBA 504 loan can reach that size for owner-occupied real estate.
Often yes. Bad credit business loans prioritize deposit consistency over personal credit score and set a 475+ FICO floor. A construction company with a fair FICO but strong monthly deposits can frequently qualify where a bank would decline.
Equipment financing terms typically run from one to ten years, often matched to the useful life of the machine, with the equipment itself serving as collateral and amounts up to $10,000,000 per piece.
It varies by product. Equipment and revenue based options start at a 475+ FICO floor, term loans at around 550, and SBA loans generally at 675 or higher. Good personal credit for a bank construction loan usually means a score of 690 or above.
Yes. Construction-to-permanent financing or a 504 loan from the SBA can fund the construction of a new building or the purchase of an existing property, releasing money on a draw schedule as the building nears completion at each milestone.
If you are comparing construction loans, start with one application. A funding specialist will match your file across our 80+ lending network, show you the real options and their full prices, and guide you from approval through funding once the build is complete, usually within one to three business days.
| One Application, 80+ Lenders: Apply once. We package your file and submit it across the network; if one lender declines, we move it to the next without restarting the process. |
This guide to construction business loans is for general information as of July 2026 and is not financial or legal advice. Loan terms, interest rates, and program rules change; figures such as SBA limits and prime-rate-linked rates should be verified with the U.S. Small Business Administration, the Federal Reserve, or a qualified advisor before you apply.
Jared Weitz is the Founder & CEO of United Capital Source (UCS), one of the nation’s fastest-growing business financing marketplaces. Since founding the company in 2011, Jared has built a technology-enabled platform that has facilitated over $1.6 billion in funding to more than 40,000 businesses across the United States. Under his leadership, UCS has evolved into a full-service marketplace that connects business owners with 80+ lenders while providing hands-on guidance throughout the entire funding process. Rather than selling client information like most lead generation companies in the business loans space, UCS works directly with each applicant—leveraging technology and experienced funding professionals to match businesses with the right financing options, structure deals, and guide them from application through funding and future growth. Jared’s work has earned national recognition, including the National Commercial Loan Broker of the Year award in 2019, and placements on the Inc. 5000 list in 2015 and 2017. He also serves as Broker Council Co-Chairman for the Small Business Finance Association, where he helps advocate for expanded access to capital for small businesses nationwide.
