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Home Business Loans Leverage Financing to Grow Your Construction Business
Your current financial or staffing limitations don’t have to hold you back from growing your construction business. Instead, a strategic approach to financing can get you the resources you need to take advantage of the opportunities on the horizon. Here’s a quick guide to small business loans to help you plan for the year ahead.
For the most part, construction companies can turn to 4 sources for financing:
The traditional standby, banks can be an excellent source for large-scale loans. If you need to invest in real estate to set up office and warehouse space, a bank can be great. But most banks focus on larger loan types, so those financing opportunities tend to have fairly long and complex application processes. Banks are useful when you’re looking at growing your construction business through a large project that isn’t especially urgent.
Many banks offer loans backed by the US Small Business Administration. These loans are generally right-sized for small businesses and come with lower entry requirements or better rates than a typical bank loan. They can be perfect if you don’t quite need the scale of support a bank would offer but have the time to wait for a lengthy application process.
If you’re looking to make a major equipment purchase or similar investment, some vendors offer special loan or equipment lease programs to help you finance the purchase. Access to these deals varies by type of asset and manufacturer, so they’re worth looking out for but aren’t an option in all cases.
Alternative lenders use nontraditional data sources and online lending processes to assess loan applications and deliver funds quickly. The entire process usually only takes a few days. This ease makes alternative lenders a perfect fit when you need money fast and may have a less-than-ideal credit score. Most alternative lenders don’t handle long, complex loans, but small, short-term financing programs can be great for growing your construction business.
When bank and SBA loans were the primary options, construction companies could pretty much only get financing for a few specific use cases. Some banks have specialized lending programs, but mostly the loans were limited to activities like starting a business, making a major expansion, or purchasing real estate. With alternative lending, you can get financing for a broader range of projects aimed at growing your construction business. A few prime options include:
Basically, if you have an urgent need that you can’t afford, you can use alternative lenders to get what you need. When it comes to growing your construction business, financing options are increasingly diverse. This flexibility is great for the small business owner. Instead of relying solely on 1 or 2 sources of loans, you can mix and match different financing options from diverse lenders based on your needs at a given moment. You can use strategic loans to take advantage of opportunities or solve problems you’d otherwise have to push off for another year.
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