Financing Options for Contractors
- The SBA (Small Business Administration) Loan Guarantee Program: Although the SBA is not a lender and provides financing through participating banks and credit unions (among others), the SBA Loan Guarantee Program will sometimes qualify a borrower who might not otherwise meet the more rigid criteria required by the bank. If your construction business has been around for a while, and your personal credit score is above 680, this could be an option for your business.
- A Short-Term Business Loan: Many online lenders offer short-term business loans for small businesses, including contractors. With terms that range from three months to three years, this type of financing makes it possible for a contractor to borrow capital and repay it quickly—often making the total dollar cost lower than a longer-term loan. Learn more about OnDeck's Short Term Business Loan.
- A Business Line of Credit: A business line of credit or Business LOC has been a popular way for contractors to quickly access capital as needed, repay the amount borrowed, and access again. The flexibility of a line of credit, makes it possible for contractors to respond quickly to opportunities. Learn more about OnDeck's Business Line of Credit.
- Equipment Financing: The equipment contractors use has set the standard for what most people think of when they consider business equipment, but that would be an incomplete definition. In addition to earth-moving equipment, cranes, and other construction equipment, the desks, computers, and other fixtures a contractor uses to do business could also qualify as equipment. Many contractors turn to equipment financing to fuel growth or otherwise fund opportunities for their businesses.
Contractors like All Clear Plumbing recommend OnDeck
SBA Guaranteed Loans and Terms
The SBA offers a number of loan guarantee programs that could be a potential fit for a contractor. The 7(a) loan program is a good place to start. Visit our SBA small business loans page for more information.
The 7(a) loan program is the most popular and probably the most flexible SBA loan. This loan is designed to fit a number of small business lending scenarios and could be a good fit if you meet the qualification criteria. It offers:
- Long-term working capital (3+ years)
- Short-term working capital (less than 3 years)
- Loans for purchasing equipment
- Loans for purchasing real estate, including property and buildings
- Loans for new construction or renovation
- Loans for establishing a new business or contributing to the purchase of an existing business
The interest rate you pay for an SBA loan is negotiated between you and the lender—subject to SBA minimums and caps[1]. Both fixed and variable rates are available and subject to an allowable spread based upon one of the following rates:
- The prime rate published in a daily newspaper
- The London InterBank one-month prime, plus 3%
- The SBA peg rate
Even though lenders are allowed to add a spread to the base rate, the maximum spread can be no more than 2.5% on loans with maturities shorter than seven years and no more than 2.75% on loans with maturities of seven years or longer.
SBA guaranteed loans typically have some of the lowest interest rates, but the qualification/application process can take weeks—or even months to complete.
OnDeck is not an SBA lender, but does offer small business loans to contractors as an alternative to an SBA loan and for those businesses where an SBA loan isn’t a good fit.
Short-Term Business Loans and Terms
A short-term business loan could be a good fit for contractors looking for capital to fuel growth or meet other working capital needs. Short-term lenders, like OnDeck, offer loan amounts up to $250,000, can often give you an answer on your loan application within 24 hours, and fund your loan within another day or two after that. Making it possible to quickly take advantage of opportunities to increase profits or otherwise fuel growth opportunities.
Short-term business lenders (like OnDeck) also look beyond a business owner’s personal credit score and whether or not they have specific assets that could be used as collateral, when evaluating a potential loan to a contractor. Of course, personal credit score, business credit profile, and other data are part of the equation, but metrics that demonstrate the overall health of the business are also considered when evaluating a business’ creditworthiness. The minimum qualifications for an OnDeck loan include:
- A Personal Credit Score of 625+
- One Year in Business
- Annual Revenues of $100,000+
A short-term loan with OnDeck does not require specific assets be identified as collateral, but a general lien on business assets and a personal guarantee will be required to secure the loan. This makes it possible for a healthy business, that doesn’t want to tie up its physical assets as collateral, to qualify for a loan.
Loan Terms
Depending upon the lender you choose, the terms offered may vary, but OnDeck offers the following loan terms:
- Loan Amounts from $5,000 to $250,000
- Repayment terms from 3 months to 12 Months
- Daily or Weekly periodic payments
- Funding in as fast as 1-3 days upon approval
Apply Now for an OnDeck Short-Term Business Loan
A Business Line of Credit
Many contractors choose a business line of credit (LOC) to meet their short-term capital needs. The flexibility of a LOC makes it possible to access the credit line when needed, make repayment, and access the credit line again as needed over the term of the LOC. Unlike a term loan, interest is only paid on the funds drawn against the credit line.
Although different lenders have different criteria for how they evaluate whether or not they will offer a business a line of credit, OnDeck offers a business line of credit and looks beyond a business owner’s personal credit score and whether or not they have specific assets that could be used as collateral, when evaluating creditworthiness. Of course, personal credit score, business credit profile, and other data are part of the equation, but metrics that demonstrate the overall health of the business are also considered when evaluating a business’ creditworthiness. The minimum qualifications for an OnDeck business line of credit include:
- A Personal Credit Score of 625+
- One Year in Business
- Annual Revenues of $100,000+
A business line of credit with OnDeck requires a personal guarantee to secure the credit line.
Terms for a Business Line of Credit
Depending upon the lender you choose, the terms may vary, but OnDeck offers the following terms:
- A line of credit up to $100,000
- Weekly periodic payments
- A $20 monthly maintenance fee (waived for six months if you draw $5,000 or more in the first five days after opening your account)
- Funding in as fast as 1-3 days upon approval
Apply Now for an OnDeck Business Line of Credit
[1] https://www.sba.gov/partners/lenders/7a-loan-program/types-7a-loans#section-header-0

What type of loan makes sense for your business?
Financing options to help you grow your business
If you’ve ever heard the adage, “It takes money to make money,” you must be a small business owner. Fortunately, there are more small business loan options available today than ever before—you just need to know where to look and what to look for. You don’t need to be a financing expert to build a successful business, but you do need to consider all the business loan options available to determine which one is best to meet your business need.
Unsecured Small Business Loans
An unsecured small business loan is simply a loan from a lender that does not require any form of collateral from a business or a business owner. This is based solely upon the creditworthiness of the applicant.
Many small business owners are interested in a loan for their business but don’t have the specific collateral a bank may require, such as specifically-identified real estate, inventory or other hard assets. Fortunately, there are lenders like OnDeck that do not require that their loans be secured by specific collateral, relying instead on a general lien on the assets of the business. These may be good options for many businesses.
Secured Small Business Loans
Banks generally prefer secured—rather than unsecured—business loans. Secured loans are loans that are backed with some sort of collateral like real estate, equipment, or other valuable business assets the bank can seize and sell if the loan is not repaid.
Banks (or other lenders that require specific collateral) commonly determine what they refer to as the loan-to-value ratio of your collateral based upon the nature of the asset. In other words, your banker may allow you to borrow against 75 percent of the value of appraised real estate or 60 percent to 80 percent of the value of what they call ready-to-go inventory. Because lenders might consider their loan-to-value ratios differently, you’ll need to ask any potential lender how they intend to set that value.
Small Business Loans for Different Industries
As a business owner, your needs may be industry-specific such as ordering kitchen supplies upfront or bridging cash flow while you wait for insurance reimbursement. At OnDeck, we understand and we offer tailored loan options (with multiple loan types, amounts, and repayment terms), so you can get a loan best suited for your industry and business. Here are some of the most common industries we work with and the small business financing options available to them.