Construction Financing

Construction businesses face a particular underwriting challenge: revenue is lumpy, receivables are slow, and the gap between mobilization costs and final draws can stretch your operating account thin even on a profitable project. Lenders who specialize in trades read your bank statements differently than a generic small-business underwriter would. ClearValue Lending routes contractor files to lender partners who understand the construction revenue cycle.

Which financing product fits which construction problem

The right product depends on what you're actually trying to fund. Match the use case to the product structure:

• Project mobilization (60–90 day gap between start and first draw): Business line of credit is usually the cleanest fit. Draw what you need at job start, pay it back when the customer pays, only pay interest on the drawn amount. Better than tying up a term loan in cyclical use.
• Equipment purchase (excavator, trucks, lifts, specialty tools): Equipment financing — collateralized by the equipment itself, often $0 down for strong credit, 24–84 month terms. Lower rates than unsecured products because the lender holds title until paid off.
• Payroll bridge in a slow month / seasonal trough: Revenue-based financing (MCA) for fast funding (1–3 days), or a line of credit if you have time to apply. Term loans are usually wrong here — paying fixed monthly installments on a one-time bridge is overkill.
• Large one-time investment (yard expansion, fleet refresh, business acquisition): Term loan ($25K–$500K from non-bank lenders, higher from banks) or SBA 7(a) if you have 24+ months in business and time for 60–90 day underwriting — including the CAPLines Contract variant built for mobilization against awarded contracts.
• Bonding capital / working capital reserve for bid qualification: Line of credit or term loan depending on whether the requirement is access-to-capital or actual cash-on-hand.

What contractor underwriting actually looks at

Construction underwriting is more nuanced than "bank statements + FICO." Specialist lenders also weigh:

• Receivables aging — how much is outstanding, who owes it, and how reliable that customer is at paying
• Project pipeline — backlog of signed contracts vs. spec/bid work
• Subcontractor vs. employee mix — affects both cost structure and how lenders interpret payroll
• Type of work — government / municipal contracts read differently than private residential; commercial differs from spec building
• Bonding history if you've worked bonded projects
• License standing and state contractor board status

Documents to assemble before applying

• 3–6 months of business bank statements (PDFs from the bank portal, not screenshots)
• Year-to-date P&L + balance sheet dated within 60 days — critical for term/line/SBA, optional for MCA
• Last 2 years of business tax returns (3 for SBA)
• Aging receivables schedule — list every open invoice with customer, amount, days outstanding
• Current debt schedule — every loan, line, equipment lease, MCA
• Contractor license + current state-board status
• Articles of formation + EIN letter + driver's license for each 20%+ owner

Field guide: what actually gets approved — and declined

Generic financing guides stop at "here's what you need." A contractor's file gets judged against a credit-band × time-in-business × revenue matrix, the same way across the network's product set — and understanding where your file lands changes which product to apply for first.

Approval matrix — credit band, time in business, and revenue

• 500–549 FICO · 6–12mo TIB · $10K+/mo deposits → Revenue-Based Financing (MCA). Lowest qualification floor in the network — approval leans on deposit consistency, not credit score.
• 550–599 FICO · 12–24mo TIB · $10–15K+/mo → MCA, or Equipment Financing with 10–20% down. Equipment lenders will underwrite a sub-600 file when the machine itself collateralizes the loan.
• 600–649 FICO · 12–24mo TIB · $15K+/mo → Non-bank Line of Credit or Equipment Financing. 600+ is the standard non-bank LOC floor; equipment pricing improves noticeably at this band.
• 650–679 FICO · 24mo+ TIB · $25K+/mo, profitable → Alternative Term Loan or Equipment (best pricing). 650+ unlocks alternative term loans; 700+ is the equipment-financing pricing cliff.
• 680+ FICO · 24mo+ TIB · profitable financials → Bank-tier Line of Credit or SBA 7(a). 680+ is the typical bank-line and SBA floor — the strongest pricing in the network sits here.

What actually gets a construction file declined

• Undisclosed MCA stacking: Bank statements show unexplained daily debits from positions the application didn't list. Underwriting always catches it in the statement review — disclosing existing debt up front lets a lender structure around it; hiding it gets the file declined outright.
• Lapsed workers' comp or GL insurance: An SBA file can hard-stop over insurance that lapsed weeks earlier, even with revenue and credit both clearing. Renewing coverage before applying — not mid-underwriting — avoids the delay entirely.
• Single-customer concentration: Heavy receivables concentration in one GC customer reads as risk on a line-of-credit file — one non-paying customer could sink the whole book. Diversifying the customer mix, or applying for equipment financing instead (collateralized, less sensitive to concentration), is the usual workaround.

Documents by product — what's actually different

• MCA: 3 months bank statements + voided check. No tax returns required — deposit consistency is most of the underwrite.
• Line of Credit: 3–6 months bank statements, YTD P&L + balance sheet, 2 years tax returns. Financials matter here; a clean receivables-aging schedule materially strengthens the file.
• Equipment Financing: Equipment quote/invoice + 3 months bank statements. Lightest paperwork — the equipment itself is the collateral.
• SBA 7(a): 3 years tax returns (business + personal), P&L, balance sheet, debt schedule, contractor license, bonding history. Full underwriting package; 60–120 day process.

How ClearValue routes contractor files

ClearValue Lending is a funding platform. We evaluate lender partners against our underwriting and conduct standards, take in your application, and route to the partner most likely to fund based on your specific file. For construction we have partners that specialize in: equipment financing across all major trades, lines of credit for project mobilization, term loans for one-time expansion, and revenue-based financing for fast-bridge needs. The lender presents the offer directly to you and handles all approval, underwriting, and funding.