In this article
Construction businesses face a financing problem that is unique to the industry. You often pay for materials and labour weeks before a client pays, while banks see the sector as higher risk. Here is how contractors in lendflo's network solve both.
The Payment Gap Problem
Most contractors wait 30 to 60 days to be paid. Materials and labour go out at once, but the client's payment lags, sometimes by months on larger projects. Working capital financing bridges this gap, so you can take the next project without waiting for the last one to pay.
Why Banks Treat Construction as Higher-Risk
Construction has historically had more revenue swings than many other sectors: project-based income, slow winters in colder regions and exposure to the wider building cycle. Banks build this into their risk models across the whole industry, even for well-run, healthy contractors. This is the gap that alternative lenders specializing in construction fill.
Equipment Covered
Contractor equipment financing commonly covers:
- Excavators, skid steers, and other heavy machinery
- Dump trucks and trailers
- Scaffolding and specialized tools
- Generators and power equipment
Getting Approved With Imperfect Credit
Equipment financing is secured by the asset itself, and working capital lenders often weigh current project revenue heavily. So contractors with less-than-perfect credit are often still fundable. Bank underwriting leans harder on credit score and years in business.
