Loans for contractors: financing options for GCs and subs in 2026

Contractors don't have a lending problem. They have a timing problem. The work is real, the contract is signed, and the money is coming — just not for another 56 days on average, per Billd's 2025 subcontractor data. Payroll runs weekly. Material suppliers want net-30. That gap is what contractor financing exists to close, and the right option depends on how fast you need cash and what your books look like. Bank and SBA loans are cheapest but slow. Short-term working capital and revenue-based financing move in a day or two, priced against your deposits, not your credit score alone.

Why contractors run into cash gaps that have nothing to do with running a bad business

This isn't a "the contractor did something wrong" problem. It's structural. A GC or sub submits a pay application, the owner's rep reviews it, retainage gets held back, and the check clears weeks — sometimes months — later. Billd and Siteline's 2025 survey work put average subcontractor payment timelines around 56 days after a pay app is submitted, well past the 30 days most GCs think it takes. Some jobs stretch past 90.

Meanwhile:

• Payroll doesn't wait. Crews get paid weekly or biweekly regardless of when the GC or owner pays you.
• Material suppliers want net-30, sometimes net-15. Miss it and you lose pricing, priority, or both on the next job.
• Margins are thin to begin with. CFMA's benchmarking data puts average pre-tax net income around 6.3% of revenue industry-wide — specialty trade contractors run a bit higher near 6.9%, nonresidential and industrial closer to 4%. There's not much room to self-fund a 60-day gap out of margin.
• New jobs require upfront spend — mobilization, bonding costs, initial material buys — before the first draw hits.

None of that shows up as a character flaw on a credit report. It shows up as a cash-flow crunch that a bank underwriting model, built for steady monthly revenue, doesn't know how to read. That's the gap contractor financing is built to fill.

The real options, compared

Bank and SBA term loans

If you can wait weeks and your financials are clean, a bank or SBA-backed term loan is still the cheapest money on the table. SBA 7(a) and working-capital lines through a bank carry lower rates than most alternative options because the government guarantee and the bank's own risk model reward stability over speed.

The catch for contractors specifically: banks want two-plus years of tax returns, a personal credit score that hasn't taken a hit, and a business that looks steady month to month. Construction revenue is lumpy by nature — big draws, dry stretches between jobs, seasonal swings for anyone doing exterior or ground work. That lumpiness reads as risk to a bank underwriter even when the business itself is healthy. And the timeline — often 30 to 90 days from application to funding — doesn't help when the immediate problem is a payroll run three weeks out.

Working-capital / short-term financing

A working capital business loan is the middle ground: faster than a bank, more flexible underwriting, and sized to cover a specific gap — payroll, a material buy, a mobilization cost — rather than a multi-year capital project. These products typically look at recent bank deposits and time in business rather than requiring the same depth of documentation a bank does.

For a GC or sub carrying multiple jobs with staggered pay-app timelines, this is usually the right-sized tool: borrow against the revenue you're already generating, cover the gap, repay as the draws come in.

Revenue-based financing / MCA

Revenue-based financing — including merchant cash advance structures — isn't a loan. It's a purchase of a portion of your future receivables in exchange for upfront capital, priced with a factor rate rather than an APR. For a contractor with strong, consistent revenue but imperfect owner credit, or a business that's simply too new for a bank's comfort zone, this is often the fastest path to cash: underwriting leans on deposits and revenue trends, not a credit-score cutoff.

Read more on how this works in revenue-based financing — it's worth understanding the factor-rate structure before you compare it against a term loan's APR, since they're priced differently and aren't apples-to-apples.

A revolving option

Some contractors want financing that doesn't have to be re-applied for every time a new job starts. ByzFlex is Byzfunder's proprietary revenue-based revolving capital product — money you can draw against as new mobilization costs or material buys come up, without restarting the underwriting process for every draw. It's not a line of credit in the traditional bank sense; it's revolving capital sized and repaid against your revenue.

Equipment financing exists — just not here

If what you actually need is a specific piece of equipment — a new excavator, a boom lift, a fleet vehicle — that's a different financing category, usually structured with the equipment itself as collateral through a specialist lender. Byzfunder doesn't offer equipment financing. If that's your need, work with an equipment-finance specialist directly; if the need is broader working capital (payroll, materials, mobilization, bridging a pay-app gap), that's where a working-capital or revenue-based product fits better.

Which trades fit this best

Revenue-based financing and short-term working capital tend to fit contractors whose revenue is strong but uneven job-to-job — which describes most of the trades:

• General contractors and construction managers juggling multiple jobs with staggered draw schedules
• Electrical and plumbing subs who front material costs before the first progress payment
• HVAC contractors with seasonal swings in install volume
• Concrete and foundation crews who need to mobilize fast for a narrow weather window
• Roofing contractors managing insurance-claim jobs where payment timing is especially unpredictable

If your business generates consistent monthly revenue even when net profit is thin, that revenue is the thing lenders like Byzfunder are actually underwriting — not just a credit score.

How contractors get approved fast

A few things speed up underwriting regardless of which option you're pursuing:

• Have 3-6 months of business bank statements ready. This is the single biggest input for revenue-based underwriting — clean, consistent deposits matter more than a perfect credit score.
• Know your monthly revenue number cold. Be ready to state it, not estimate it.
• Separate business and personal banking if you haven't already. Commingled accounts slow every underwriting process down.
• Have your entity paperwork current — EIN, business license, formation docs. Missing paperwork is the most common reason a fast application stalls.
• Be upfront about existing financing. If you're already carrying a merchant cash advance or another working-capital product, disclose it — stacking undisclosed obligations is a fast way to get declined.
• Apply once you know the gap, not after it's already a crisis. A contractor applying three weeks before a payroll crunch has more options than one applying the day it hits.

Bank-declined isn't the same as high-risk

A lot of contractors who get turned down by a bank assume that means something is wrong with the business. Usually it doesn't. It means the bank's underwriting model wants two years of smooth, predictable financials, and construction revenue is inherently lumpy — big draws, slow stretches, seasonal swings. A GC with $80,000 a month in real revenue and a 580 credit score because of a rough personal year is a completely different risk profile than a business that's actually struggling, but a bank's scorecard often can't tell the difference.

That's the gap a direct lender underwriting on revenue and deposits is built to close. If you've been declined by a bank, or you know your personal credit isn't where you'd like it, that's not disqualifying — see business loans for bad credit for how that underwriting actually works.

The contract is real, the payment is coming — the only question is whether your business can survive the gap between now and the check clearing.

Byzfunder underwriting perspective

Bottom line

Contractors aren't a risky category of borrower — they're a category of borrower whose cash flow doesn't match how banks underwrite. If you've got time and clean financials, a bank or SBA loan is still the cheapest capital around. If you need cash in days, not months, working-capital and revenue-based options — priced against what your business actually deposits, not just a credit score — are built for exactly this gap. Byzfunder funds directly from its own balance sheet: $1.75B+ funded since 2019 to 30,000+ businesses, with same-day to 24-hour decisions for qualifying contractors.

FAQ

What financing options are available for contractors?

Bank and SBA term loans, short-term working-capital financing, revenue-based financing (including merchant cash advance structures), and revolving revenue-based capital like ByzFlex. Equipment financing is a separate category for buying or leasing specific machinery and isn't a Byzfunder product.

Can a GC or sub get financing with less-than-perfect credit?

Yes. Revenue-based underwriting looks primarily at business bank deposits and time in business rather than leaning entirely on a personal credit score. A business generating consistent revenue can qualify even if the owner's credit isn't spotless. See business loans for bad credit for how that works.

How fast can a contractor actually get funded?

It depends on the option. Bank and SBA loans typically take weeks to months. Byzfunder, as a direct funder, can move from application to a same-day or 24-hour decision for qualifying businesses — useful when a payroll run or material payment can't wait on a bank's timeline.

Is a merchant cash advance the same as a loan?

No. A merchant cash advance is a purchase of a portion of a business's future receivables in exchange for upfront capital, priced with a factor rate rather than a traditional interest rate or APR. It's a different structure than a term loan, and it's worth understanding that difference before comparing offers side by side.

What's the minimum revenue or time in business to qualify?

Byzfunder generally looks for businesses generating $20,000 or more in monthly revenue with at least one year in operation, and a FICO score in the 525-550 range depending on the product. Exact fit depends on the full underwriting picture.

Does Byzfunder offer equipment financing?

No. Equipment financing — where a specific piece of equipment like an excavator or aerial lift serves as collateral — is a different product category. Byzfunder focuses on working capital and revenue-based financing; for equipment purchases, work with an equipment-finance specialist directly.

What's the difference between a term loan and revenue-based financing for a contractor?

A term loan is borrowed money repaid on a fixed schedule at a set interest rate — cheaper if you qualify, but underwriting is slower and stricter. Revenue-based financing purchases future receivables at a factor rate and is typically faster to fund, with underwriting weighted toward current business revenue rather than credit history alone.

How do I avoid getting declined when I apply for contractor financing?

Have 3-6 months of clean business bank statements ready, keep business and personal banking separate, make sure your entity paperwork (EIN, license, formation docs) is current, and disclose any existing financing upfront. Applying before the cash gap becomes urgent — rather than the week payroll is due — also gives you more options. See the checklist above for the full list.

Related reading: construction business loans · best AI tools for construction crews · working capital business loans · business loans for bad credit · revenue-based financing