For many businesses, the only option they have to grow is to get a loan. Without this type of financing, it’d be impossible for them to take advantage of many business opportunities. Knowing how to get a business loan is very important knowledge.
This is especially true for construction businesses because, in order to start working on a new project, they need money to buy materials, equipment and to pay the employees. Unfortunately, for these businesses, it can be harder to access to a business loan.
What stands between your construction business and a business loan?
“How to get a business loan?” is a common question amongst owners of small construction businesses. For these types of businesses, it can be a bit more tough to access credit if compared to other types of businesses.
Unlike restaurants, car repair shops or any retail business, construction businesses don’t generate profits in the short term as easily.
This low cash flow happens mainly due to the fact that in this industry it’s fairly common for clients to not pay upfront. Payments are usually made during several stages of the project, or sometimes only fulfilled until the work is finished
Unfortunately, banks and some lenders are aware of the financial problems that commonly affect construction businesses, and are inclined to reject loan applications from businesses in this industry.
Similarly, for a contractor to access a bank or SBA loan, they need to meet certain requirements: having a high credit score, never had gone bankrupt before, never have been seized, and having more than 5 years in the business, just to mention a few.
For most owners it is difficult to meet some of these requirements, that end up becoming a barrier to capitalize on their construction business.
In response to the question of how to get a business loan, the answer lies in alternative lenders that can be the most viable financing option.
How can a loan help you expand your construction business?
For owners of this type of business, getting a new contract can become a real problem. If they do not have the money to buy tools or hire labor, it will be impossible for them to finish the job or deliver it within the established deadline.
That’s why, for the owners of small construction businesses, a loan opens the door to many opportunities.
With the money provided by a loan, they could finance all the costs associated with a project:
- buying materials and spare parts for machinery
- renting sanitary facilities
- preparing for unforeseen expenses, such as subcontracting qualified personnel to take care of certain parts of the work
Although business loans are used to cover these costs, it is common for the loan money to be used mainly to pay employees’ salaries and to invest in construction equipment (which have very high prices).
These resources turn out to be of great help in other fronts too. Those who seek to expand their operations and obtain more contracts can use a loan to improve their facilities, open new offices, hire more staff, and train their employees.
How to get a business loan
After listing some of the financial difficulties construction business face, and reviewing the opportunities that a loan offers to these companies, it’s time to figure out how to get a business loan if you’re a contractor.
First and foremost, and as we mentioned, if you do not qualify for a bank loan, you will have to find an alternative lender, such as Camino Financial.
To access a loan, follow these steps:
- Complete an application about you and your business. This will help lenders understand what kind of business you run.
- A loan specialist will contact you to learn more about your company and explain what your options are, and the financing alternatives they can offer. During this stage of the process, you will be able to ask anything and clarify any doubts.
- Send basic financial records of your business. With them, the lender can find out which credit is best suited to your needs. Online lenders will allow you to send all your records online, easily and securely.
- After the lender has carefully reviewed your application, they will send you a final offer explaining the credit conditions. You must accept it, as well as the terms of the loan, to be able to access the capital. After signing it, you will receive the funds in your bank account.
Requirements you must meet
When applying for a loan with Camino Financial you will notice that our approval criteria are more flexible than those of banks. To make a decision, we only take into account your company’s cash flow, your credit score, and the way you intend to invest the money.
However, you must meet some requirements:
- To be able to access a small businesses loan, your company must have been operating for at least 9 months
- Your business should generate sales of $30,000 per year or $2,500 per month
- As a business owner, you must have a FICO credit score of 550 or more
You can access the Camino Financial small business loans in just two days. We offer our clients favorable interest rates and the best terms in the market.
Our mission is to ensure that anyone has access to the capital they need to finance their ventures and help smaller businesses grow.
Now you know how to get a business loan
How to get a business loan for your construction business should not be a concern for you. Although it may be difficult for a bank to approve a loan, given that this sector of the market could be considered stationary and inconsistent, there are alternatives to obtain the working capital you need to finance your projects.
Buying materials, hiring labor, and acquiring new equipment are just some of the ways you can invest the money from a loan. You can also use it to expand your operations and get new contracts, which will ultimately grow your construction business.
At Camino Financial we will help know how to get a business loan that is flexible and that fits what your business needs. Apply now and receive the funds in a few days!