Alternative Lending Options for the Construction Industry

While bank loans may seem like the gold standard in terms of lending options, there are many cases when a traditional loan from the bank may not be the ideal choice. Whether you have a low credit score, lack of business history or looking for flexible spending that may not be possible with conventional options, it may be time for an alternative option. Compare alternative lending options for the construction industry to secure your construction equipment, inventory or working capital.

SBA Loans

A great option for businesses looking for extensive working capital or capital for a major asset is an SBA loan. These loans are backed by the Small Business Administration and are geared toward business owners who may not qualify for a traditional loan due to their inexperience.

Because of the SBA backing, you can enjoy one of these loan options when you otherwise wouldn’t qualify for a conventional loan. Unfortunately, you can expect to spend additional time filling out separate applications for the SBA and for your chosen lender. These loans have less restrictions but still require a certain credit score to apply.


One of the most versatile and easy-to-access credit options for the construction industry is factoring. This flexible option doesn’t require you to have an excellent credit score, a number of years in business or other common restrictions given by lenders. Instead, your lender looks at the credit score and financial history of your customer and uses that to determine whether you’re approved for the financing.

Once you’ve become approved, you can receive a large portion of your invoice in just a few days. Don’t wait up to 90 days to see payment for your construction services, but enjoy rapid funding for your next project. Because factoring uses your own invoices as collateral there aren’t any restrictions on how you spend your cash.

Equipment Financing

Secure the construction equipment you need to start your next project with equipment financing. Receive a loan or lease that uses your equipment as collateral. This gives you immediate use of your equipment with little or no down payment. Don’t invest in a costly down payment but keep your working capital available for inventory, payroll or other expenses.

An equipment lease is a great way to temporarily use costly equipment without investing in a purchase. Once your lease is up, simply return the equipment and start a new lease on a newer version of the same equipment or another piece of specialized machinery for your next project.

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