Merchant Cash Advance for Construction Companies
Contractors get paid on the client's schedule, not their own. Payroll, materials, and equipment come due weeks before a progress draw clears — and retainage can hold back 5–10% of a job until it's finished. A merchant cash advance turns your future revenue into working capital in days, so a slow-paying general contractor doesn't stall your next job.
Checking offers won't affect your credit score. No obligation.
Why a Merchant Cash Advance Fits Construction Cash Flow
Construction is one of the most cash-flow-strained industries in the country. The money you owe (payroll on Friday, a supplier deposit on Monday) rarely lines up with the money you're owed (a draw approved 30–60 days out). That timing gap — not a lack of profit — is what puts contractors in a bind. An MCA is built for exactly this mismatch.
Repayment flexes with your billing
Repayment is a fixed percentage of your deposits, so the amount pulled scales down in a slow month between projects and up when several draws land at once. Seasonal and project-based revenue swings are absorbed automatically.
Funded in days, not weeks
When a bid deadline, a mobilization cost, or a broken excavator can't wait for a bank's committee, MCA providers can approve on bank-statement history and fund within 24–72 hours.
Underwritten on revenue, not just credit
Many contractors carry credit dinged by a rough winter or a client who paid late. MCA underwriting leans on your monthly deposits, so a sub-600 score doesn't automatically end the conversation.
No specific collateral required
Unlike equipment financing, an MCA isn't tied to a single truck or machine. The capital is unrestricted — useful when the gap is payroll and materials across three active jobs, not one purchase.
What Construction Companies Use the Capital For
Because the funds are unrestricted, contractors put an MCA to work wherever the timing gap hits hardest:
- •Payroll between draws. Crews get paid weekly; a general contractor pays you monthly. An advance bridges the four weeks in between so you don't lose your best people.
- •Materials and supplier deposits. Lumber, concrete, steel, and fixtures often require deposits or COD before the client reimburses you in the next billing cycle.
- •Equipment repair, rental, or a quick purchase. A down machine idles a whole crew. Fast capital covers the repair or a rental until cash frees up.
- •Mobilization on a new job. Bonding, permits, site prep, and initial labor all hit before the first invoice — the classic "you have to spend money to start the job" gap.
- •Bridging retainage and slow change orders. When 5–10% of every invoice is held until completion, or an approved change order takes weeks to pay, an advance keeps the other jobs moving.
What It Actually Costs: A Real Example
An MCA is priced with a factor rate, not an interest rate. You multiply the advance by the factor rate to get your total payback — the number doesn't change based on how quickly you repay. Here's a representative contractor scenario:
On a roughly 10-month term, that $97,500 is collected as a small daily or weekly holdback on your deposits. Factor rates in the market generally run from about 1.10 to 1.50 depending on your revenue, time in business, and credit — which translates to a high effective APR (often 40–150% once you annualize a short payback). That's the honest tradeoff: an MCA is fast and accessible, but it is expensive capital. It earns its cost when it lets you make payroll, hold a crew, or start a profitable job you'd otherwise lose — not as long-term financing.
Run your own numbers before you sign: our MCA cost calculator shows total payback and estimated effective APR for any advance amount and factor rate, and the provider comparison table lets you line up 24 funders side by side.
Do Construction Companies Qualify?
Qualification is deliberately more forgiving than a bank loan. Most providers look at three things:
Time in business: 6+ months
Many funders approve at 6 months of operating history; more options and better rates open up past the 1-year mark. Pre-revenue startups don't qualify for any MCA.
Monthly revenue: roughly $10K–$15K+
Underwriting is driven by consistent bank deposits. Steady monthly revenue matters more than any single large draw, so keep a clean, deposit-rich bank record.
Credit: 500+ is often workable
Because repayment is revenue-based, several providers accept scores as low as 500. A higher score simply earns a lower factor rate. You'll typically submit the last 3–6 months of business bank statements to apply.
Watch out for: stacking multiple advances at once, and any offer promising "guaranteed approval." A legitimate funder underwrites your file. If a broker guarantees a yes before seeing a single bank statement, walk away.
Honest Alternatives to Compare First
An MCA is the fastest and most accessible option, but it's also the most expensive. If you have the time and the credit, one of these may cost you far less. A good funder will tell you the same.
Equipment financing — for a specific truck or machine
If the need is a single asset — a dump truck, excavator, or skid steer — equipment financing is almost always cheaper, because the equipment itself is the collateral. Use an MCA only when the gap is broad (payroll + materials across jobs), not one purchase.
SBA 7(a) / 504 loan — cheapest capital, if you can wait
SBA loans carry the lowest rates and longest terms, but they demand strong credit, tax returns, and weeks-to-months of underwriting. Great for planned growth; useless for a payroll run due Friday.
Business line of credit — for recurring gaps
A revolving line you draw on as needed and only pay interest on what you use. If your cash-flow gap is a recurring monthly pattern rather than a one-time crunch, a line of credit is usually the better structural fit.
Invoice factoring — a natural fit for contractors
If your gap is unpaid invoices from creditworthy general contractors, factoring advances cash against those receivables and can be cheaper than an MCA. It works best when your customers are large, reliable payers.
Not sure which fits? Answer five quick questions and we'll point you to the right product for your credit, revenue, and timeline — or see the best MCA providers by situation.
Construction MCA: Frequently Asked Questions
Can a construction company get a merchant cash advance with bad credit?
Often, yes. Because MCA repayment is a percentage of your deposits, underwriting leans on your monthly revenue rather than your personal credit score. Several providers approve contractors with scores as low as 500. A weaker score usually means a higher factor rate, not an automatic decline — but no legitimate funder can promise approval before reviewing your bank statements.
How fast can a contractor get funded?
Most MCA providers can approve within a day of receiving 3–6 months of business bank statements and deposit funds in 24–72 hours. That speed is the main reason contractors choose an MCA over a bank loan or SBA program when a bid deadline, payroll run, or equipment breakdown can't wait.
How much can a construction business borrow with an MCA?
Advance size is tied to your monthly revenue — typically a portion of your average monthly deposits. Smaller contractors commonly see offers from $10,000 to $150,000, while high-revenue firms can access $500,000 or more from providers that specialize in large advances. Borrow only what your deposits can comfortably repay through the holdback.
What do I need to qualify?
Three things: at least 6 months in business, consistent monthly revenue (roughly $10,000–$15,000+ in deposits), and a credit score that's often acceptable at 500 or above. You'll submit the last 3–6 months of business bank statements. Pre-revenue startups are not eligible for any MCA product.
How does repayment work if my income is seasonal or project-based?
Repayment is a fixed percentage of your deposits (a "holdback") collected daily or weekly. When several draws land, more is collected; in a slow month between jobs, less is collected. That built-in flexibility is why the structure suits the lumpy revenue of construction better than a fixed monthly loan payment.
Is an MCA better than equipment financing for construction?
It depends on the need. For buying a single truck or machine, equipment financing is usually cheaper because the asset is the collateral. An MCA is the better tool when the need is broad and urgent — payroll, materials, and mobilization across multiple active jobs — where speed and unrestricted use matter more than the lowest possible rate.
Can I use an MCA for payroll and materials?
Yes. MCA funds are unrestricted working capital, so contractors routinely use them for payroll between draws, supplier deposits, permits and mobilization, equipment repair, and bridging retainage. There's no requirement to spend the money on a specific asset.
What does a construction MCA actually cost?
Cost is set by a factor rate, generally around 1.10 to 1.50. On a $75,000 advance at 1.30, you repay $97,500 — a $22,500 cost of capital — regardless of how fast you pay it back. Annualized over a short payback, that's a high effective APR (often 40–150%), so an MCA makes sense for short-term gaps, not long-term financing. Use our calculator to model your own numbers.
In another industry? See our guides to merchant cash advances for trucking companies and restaurants, or compare the best MCA providers by situation.
Keep Your Crews Working Between Draws
Get matched with funders who understand construction cash flow. Fast, free, and no obligation to accept.
No credit check to see offers. No obligation.