How to Access Construction Loan Rates from 75+ Lenders
Getting financing for your construction business can be an uphill battle, especially if you try to go through a bank. Traditional lending often limits your options, making it harder to qualify for a loan to support operations during slow seasons or take advantage of opportunities when you’re ready to grow.
Does that mean you’re stuck waiting on a bank, keeping your fingers crossed and hoping your application will be approved? Not at all. There are plenty of lenders out there with construction loan rates and terms that meet your needs.
Here’s what you need to know to get connected with the right funding source.
Construction Business Financing Options
In an ideal world, every business would have reliable sources for sales and contracts, every customer would pay on time and there would be no such thing as a cash flow problem. However, cash flow fluctuations are one of the realities of the business world, especially for seasonal operations like your construction company.
It’s not unusual to find yourself in need of more cash than you have on hand to cover expenses or make strategic investments, and those are the times a business loan can come in handy.
Many business owners seek one of these common financing options:
- Short-term business loan
- SBA loan
- Business line of credit
- Equipment financing
- Accounts receivable financing
Some of these loans are structured for specific aspects of your business, such as purchasing new construction equipment, and others can be used to cover any type of expense. Before applying, though, you need to determine if you qualify for funding.
What Are the Requirements for a Construction Loan?
Loan application requirements can vary widely between lenders. Banks are known for being the most stringent, which can make qualifying difficult for businesses in some industries. Construction is typically considered “high risk” because of potentially unstable cash flow, and the degree of uncertainty involved in securing consistent work.
Poor credit scores are also a barrier, because banks tend to look at your score as a measure of how reliable you’ll be with payments. If your business or personal credit doesn’t live up to their standards, it could put a barrier between you and a construction loan. However, credit score isn’t everything, and banks also look at:
- Time in business
- Annual revenue
- Debt-to-credit ratio
- Availability of collateral
It can be difficult to show banks the financial strength they want to see in these areas when you do most of your business during one part of the year and don’t take on as many jobs the rest of the time. Falling short in one could make your business look weaker than it really is, causing banks to become wary of extending funding.
Another option is to seek alternative financing. Online lenders often have less strict qualifications, and many are willing to work with imperfect credit scores & financial histories. For example, to qualify for a loan from National Business Capital & Services, you generally need:
- 3 to 6 months in business
- A minimum of $120,000 in Annual Gross Sales
- No minimum FICO (for most loans)
A few loan types do have FICO requirements or are only available to more established businesses, but there are still multiple other options for companies that don’t meet those specific requirements.
How to Apply for a Business Loan
To qualify for a loan, you must prove to the lender that your business is profitable and you’re financially prepared to make monthly payments. Banks ask for a significant amount of paperwork to demonstrate financial stability, which means you have to prepare:
- A detailed business plan
- Profit and loss statements
- Balance sheets
- Cash flow projections
- Recent tax returns and/or bank statements
To be completely prepared, know in advance how much funding you need and the exact expenses it will go toward. You should also look up your credit score and familiarize yourself with your typical monthly and annual revenue numbers so that you can give the bank all the required data along with your application.
This process can take a pretty long time, and waiting for approval takes even longer. Working with alternative lenders helps you obtain your financing fast and easy. You also won’t have to gather nearly as much financial information as a traditional bank.
At National, all you need to do is:
- Complete a digital application
- Submit 3 months of bank statements
Once your application is received, a business financing consultant will reply within 24 hours to discuss your options.
Get More Funding Opportunities from a Global Marketplace
Of course, there are a lot of financing options in the alternative space. How can you be sure you’ll find the best construction loan lenders without spending a ton of time applying to multiple places and waiting for responses?
This is not only a huge hassle, but it can also wreak havoc on your credit score if any of the lenders you apply to perform “hard pull” credit checks.
National Business Capital & Services is equipped to do the footwork for you with a global marketplace of over 75 lenders. By looking at loan offers across this exclusive network, the financing advisors at National can use your qualifications to pinpoint the best rates and terms on the amount you need for your construction business. Instead of submitting numerous applications, you submit just once through National to start the search process.
To date, we’ve secured $1 billion in financing for businesses in thousands of different industries, many of them construction!
Find the Best Construction Loan Rates for Your Business
Having a wide network of lenders to choose from opens up more doors to get the financing you need to support your construction company. The financing advisors at National have experience searching through all the available options to help small businesses get access to funding, even those in industries banks usually impose limitations on or reject outright.
Get started with the application process online, or call National Business Capital and Services to discover the top loan options to meet your needs.