- Line of Credit vs. Term Loan – Lines of credit offer ongoing access to funds as needed, while term loans provide a one-time sum that cannot be replenished.
- Minimum Qualification Requirements – Construction businesses need 3+ years in business, an owner FICO of 650+, and $500K+ in annual revenue for approval.
- Typical Credit Limits – Approved credit lines range from 15% to 20% of annual gross revenue, meaning a $1M business may qualify for $150K to $200K.
When it comes to working capital for the construction businesses, loans usually don't cut it because of the way the debt product is structured. With a Term Loan, the money only gets used once and once funds are depleted, there is no more availability to access funds. Whereas with a line of credit, money can be constantly drawn and repaid as receivables come in and expenses are paid out.
To be approved for a Line of Credit the Business must meet these minimum requirements:
Time in Business: 3+ years
Owner FICO: 650+
Annual Gross Revenue: $500,000+
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Approvals for a line of credit for the Construction Industry generally are calculated at 15% to 20% of the Annual Gross Revenue. For example if your Construction Business generates $1,000,000 in Total Gross Revenue Annually, an expected approval of $150,000 to $200,000 could be expected.
To explore how much your business could qualify for please Book a Call with our Team or Start the Application Here.
