If you run a construction company, you know how challenging securing the right financing for your business can be. Whether you want to expand your business, purchase equipment, consolidate certain business debts, or supplement your cash flow, an SBA loan could be the solution.

SBA loans offer flexible, affordable funding options to help contractors grow, stay liquid, and compete for larger jobs. From equipment financing to contract management, the right loan program could set you up for long-term success.

Why SBA loans work for construction firms.

SBA loans, like the SBA 7(a) and SBA 504 programs, are ideal for industries with:

  • Capital-heavy operations (like vehicles or equipment)
  • Project-based cash flow
  • Long payment cycles (including delayed or staggered payment timelines)

But unlike traditional commercial construction financing options, SBA loans offer key benefits to smaller contractors, like:

Since these loans are partially government-backed, SBA lenders are often more willing to work with contractors—even those with uneven revenue or less time in operations. Because of this, many small businesses rely on these loans to fund their construction, renovation, and refinancing needs.

Top SBA loan types for contractors.

The SBA offers three main loan programs for contractors: SBA 7(a) loans, SBA Express loans, and SBA 504 loans. These are the main benefits of each, and which types of businesses they’re geared toward.

SBA 7(a) loan

SBA 7(a) loans are one of the most flexible options for small businesses. Construction companies can use them for working capital, equipment financing, expansion, debt refinancing, and more. Loan amounts cap out at $5 million and come with long repayment terms—up to 10 years (general use) or 25 years (real estate).

These loans are ideal for contractors with ongoing project needs, plans for future growth, and new acquisitions.

SBA Express loan

SBA Express Loans typically have a faster turnaround time than traditional business financing. However, interest rates may be higher. Loans cap out at $500,000. Collateral isn’t required for loans up to $50,000.

These are geared toward businesses seeking immediate working capital or smaller equipment purchases.

SBA 504 loan

SBA 504 loans are designed for purchasing fixed assets like heavy equipment or machinery, warehouses, or commercial real estate. They may also be used to consolidate or refinance certain business debts.

These loans are structured with 10- to 25-year repayment terms, fixed interest rates, and up to a 10% down payment requirement. The maximum loan amount is $5.5 million (with exceptions).

SBA 504 loans are best for contractors investing in large, long-term assets.

What construction companies can finance with SBA loans.

SBA loans for construction companies are versatile. Business owners can use funds for things like:

  • Heavy equipment financing (excavators, backhoes, forklifts, trenchers, etc.)
  • Vehicles (work trucks, trailers, fleet vehicles, etc.)
  • Office expansion (either leasing or buying warehouses or land)
  • Working capital for materials, labor, or insurance while waiting on project payouts
  • Hiring new workers or subcontractors before project payments arrive
  • Bonding and licensing costs (to meet or maintain business compliance requirements)
  • Consolidating or refinancing eligible business debt
  • New business acquisition

Check with different SBA lenders—and SBA loan programs—to find the right solution for you.

Overcoming construction industry-specific financing challenges.

Dealing with complex financing challenges as a construction business? Here are some solutions:

  • Irregular cash flow—Use SBA funding to bridge gaps between billing milestones
  • Delayed payments—Get a line of credit or working capital to meet payroll and vendor obligations
  • Equipment depreciation—Spread out costs with fixed-rate SBA loans instead of using up all available cash
  • New project acquisition and onboarding—Invest in mobilization before that first payment hits

SBA eligibility requirements for construction businesses.

Business loans for contractors, even loans through the SBA, come with their share of requirements. While every SBA loan program operates a little differently, these are the main SBA loan requirements:

  • U.S.-based, for-profit business
  • Meet SBA size standards (typically under $39.5 million in annual revenue)
  • 2+ years in operation (lenders may work with startups with considerable experience and a strong business plan)
  • Minimum personal credit score (usually 650+) and business credit score (usually 165+)
  • Proof of ability to repay loan funds (can be shown through historical revenue, cash flow projections, or project pipeline)
  • Collateral like commercial real estate, equipment, or accounts receivable (requirements depend on loan size)
  • Personal guarantee (typically required for those with 20% business ownership)

SBA loans for construction companies may also have maximum revenue requirements. Specific lenders may have their own fees and other criteria.

How to strengthen your SBA loan application as a contractor.

Even if you don’t have the best credit or most established firm, you could still qualify for a business loan as a contractor. Here are some ways to overcome the odds:

  • Show project history through completed projects and success metrics
  • Include detailed cash flow projections (accounting for delayed payments and retainage)
  • Highlight equipment financing needs and explain how new equipment will increase project capacity or ROI
  • Provide lenders with relevant certifications and licenses illustrating business legitimacy and compliance
  • Prepare a business plan with clear growth strategy and use of funds

Key considerations before you apply.

Ready to apply for business financing? Do these things first:

  • Make sure you meet both the SBA’s and the specific lender’s eligibility requirements
  • Consider seller financing for used equipment alongside an SBA loan
  • Look for lenders experienced working with construction firms
  • Review loan contract terms carefully
  • Be prepared to explain slow periods and your ability to cover loan payments during off-seasons

Be sure to apply before you need the funds so you’ll have them when needed.

SBA loans help contractors grow.

As a construction firm, you could leverage an SBA loan to manage contracts, purchase equipment, fund growth, and even refinance certain debts. These loans can provide the reliable, flexible capital your company needs to take on bigger—and better—projects, build a stronger team, and succeed against the competition.

Ready to apply? Find the SBA funding you need with Lendio.