Contractors hear the same line from banks over and over: "construction is a high-risk industry." It usually isn't about your business. It's about how construction gets paid — and that is exactly what other kinds of funding are built for.
Why banks say no
Bank underwriting wants steady, predictable monthly revenue. Construction rarely looks like that:
- Slow pay. General contractors and owners often pay 45 to 60 days after you invoice, or later on pay-when-paid terms.
- Retainage. A slice of every invoice can be held until the project closes out.
- Lumpy revenue. One big job shows up as a spike, then a gap, on your bank statements.
- Seasonality. Winters, weather and permit delays all show up in the numbers.
None of that means you are a bad borrower. It means a bank's checklist doesn't fit how you get paid.
Option 1: Invoice factoring
Factoring turns invoices you've already earned into cash now. A factor advances a large share of the invoice up front and pays the rest, minus its fee, when the GC pays.
The key difference: approval leans heavily on who owes you. A creditworthy GC or public agency can matter more than your own credit score. Watch for retainage, pay-when-paid clauses and lien waivers — they affect what can be factored.
Option 2: Equipment financing
Excavators, skid steers, trucks and trailers can be financed against the equipment itself. Because the machine is the collateral, lenders are often more flexible than a bank on time in business and credit. It also keeps your cash free for payroll and materials.
Option 3: A line of credit for the gaps
A revolving line lets you draw for materials or a mobilization, then pay it back when the draw comes in. You only pay for what you use. It fits contractors with a few years of steady deposits.
What to be careful with
Fast advances (MCAs) are easy to get and expensive. Daily payments on top of 60-day receivables can choke a contractor quickly. If you're considering one, read our honest MCA guide and run the offer through the Offer Decoder first.
What to send to get real options
- Last 3–6 months of business bank statements
- Open invoices / A/R aging, with who owes each one
- A quote for any equipment you need
Travis will tell you which of these options fits — including when the honest answer is "wait."