For a construction company, the best merchant cash advance is one backed by steady deposits, with a payment that survives the months when the general contractor is slow to pay. Merchant Fund Express, our recommended funder, reviews your sales and deposits, often decides in 2 to 4 hours, and tends to fit when you need materials or payroll now. If your real problem is getting paid in 60 or 90 days, factoring may be better; and if your paperwork is in order and you can wait, an SBA loan usually costs less.
Below you will find the ranked list, a comparison table, and a guide to choosing based on how you get paid: progress billing, retainage, cash, or invoices to general contractors.
Key takeaways
- A merchant cash advance is repaid from future sales with daily or weekly payments; it fits when your deposits are steady.
- If you get paid in 30, 60 or 90 days, factoring turns those invoices into cash sooner.
- Retainage holds back part of every payment until the job is done: factor it in when you size the payment.
- The SBA offers CAPLines, including a builders line, for owners who can wait out the process.
- Avoid stacking advances: two or three daily payments can sink a company with good jobs on the board.
- Size the payment against your slow season, not the month you collected three progress draws.
The best options for contractors, in order
- Merchant Fund Express (recommended funder). Best for contractors with steady deposits who need money fast: materials to mobilize a job, payroll while you wait on a draw, or a repair on a machine that is down. It reviews your sales and deposits, works with FICO 500+ and offers $5,000 to $5,000,000. Collateral is not required in most cases, applying does not impact your credit, it accepts applicants with an ITIN (no SSN needed), and it offers Spanish-speaking support.
- Invoice factoring. Best for subcontractors who bill general contractors or commercial clients that pay late. The factor advances most of the invoice and collects when your customer pays. Your customer's credit matters more than yours.
- Construction line of credit. Best if the need repeats on every project. You draw what you need, pay it down and draw again. It usually requires more history than an advance.
- Equipment financing. Best for buying a mini excavator, a trailer or a work truck. The equipment secures the financing and the term matches its useful life.
- SBA 7(a) or CAPLines. Best if you have financial statements, current taxes and time. The SBA offers CAPLines for short-term and cyclical working capital needs, including a builders line. Since March 2026, every owner must be a U.S. citizen or U.S. national.
- Supplier credit. Best for day-to-day materials. Many supply houses open contractor accounts on 30-day terms. It is not a loan, but it eases cash flow.
Comparison table
| Option | Speed | How you repay | What matters most | Collateral |
|---|---|---|---|---|
| Merchant Fund Express | Decision often in 2–4 hours | Depends on the offer | Sales and deposits; FICO 500+ | Not required in most cases |
| Factoring | Days | Your customer pays the invoice to the factor | Your customer's credit | The invoices |
| Line of credit | Days to weeks | Payments on what you draw | History and credit | Depends |
| Equipment | Days | Fixed payments | The equipment and your down payment | The equipment |
| SBA 7(a) / CAPLines | Weeks or longer | Monthly or tied to the job cycle | Credit, cash flow and paperwork | Depends on amount and lender policy |
| Supplier credit | Days | Invoice due in 30 days | Your history with the supply house | No |
How we rank: no ratings or scores, just fixed criteria: speed, time in business, minimum credit, ITIN acceptance, documents, amounts and collateral. Details in how we rank business funding options.
How a merchant cash advance works in construction
A merchant cash advance is not a traditional loan: the funder advances money in exchange for a share of your future sales. The cost is usually expressed as a factor rate, and payment is drafted from your account daily or weekly, either as a fixed amount or as a percentage of your deposits. To understand the product in depth, read our merchant cash advance complete guide.
In construction, three details change the math:
- Uneven collections. You can collect a lot in one month from progress billings and almost nothing the next. A fixed daily payment feels very different in those months.
- Retainage. On many contracts, the customer holds back a percentage of each payment until the job is complete. That money is yours, but you do not have it. If your advance payment is sized on what you bill rather than what you collect, you can come up short.
- Seasons. Rain, cold or the year-end slowdown stop jobs. Ask whether the payment can adjust to your actual deposits.
That is why you should always ask whether the payment is fixed or a percentage of sales, and what happens if deposits drop for a month.
When to use an advance, and when not to
It usually makes sense when:
- You won a job and need materials and crew before the first draw.
- A machine broke down and every day it sits costs more than the financing.
- You have steady deposits and the bank turned you down over credit or time in business.
- The opportunity is one-time and the money comes back within a few months.
Think twice when:
- Your problem is a general contractor who takes 90 days to pay. Factoring attacks the cause.
- You need equipment you will use for years. Longer-term equipment financing fits better.
- You already have another advance with a daily payment. Adding one more can choke cash flow even with good jobs on the board.
- The job has very thin margins and high retainage.
If you already have an advance and the payment is choking you, the first step is to talk to the funder about lowering the payment. We cover how in how to lower an expensive MCA payment.
What funders look at in a construction company
- Recent deposits. How much comes in, how often, and whether any months sit at zero.
- Negative days. Frequent overdrafts worry underwriters more than a low score.
- Contracts and customers. A signed contract, a purchase order or a list of active jobs helps explain what the money is for.
- Licenses and insurance. Your contractor license, general liability and workers' comp, depending on your state and trade.
- Other financing. Advances or loans with daily or weekly payments show up on your statements; disclose them up front.
- Owner credit. It weighs more with banks and SBA; in sales-based financing it weighs less, though better credit usually brings better offers.
A practical tip for contractors who collect partly in cash or checks: deposit everything into the business account. What is not deposited does not exist for the funder.
How to choose based on how you get paid
| How you get paid | Option that usually fits |
|---|---|
| Invoices to general contractors, 30 to 90 days | Invoice factoring |
| Progress billing with regular deposits | Merchant cash advance or line of credit |
| Residential customers, with a deposit and final payment | Cash advance to mobilize, or supplier credit |
| High retainage until the job closes | Line of credit or working capital with a payment tied to deposits |
| Buying machinery | Equipment financing |
| Established company, no rush | SBA 7(a) or CAPLines |
Common contractor mistakes: using a short-term advance to pay for a machine you will use for years; signing without asking whether the payment is fixed or a share of deposits; forgetting that bonds, insurance and permits also come out of cash flow; and sizing the payment on the month you collected three draws at once. Before you sign, list your jobs for the next three months and check, week by week, what you will actually collect.
To compare every option in the industry, not just advances, see the best funding for construction.
How to apply, step by step
- Pull three to six months of business bank statements.
- List your active jobs with amounts, dates and whether they carry retainage.
- Define exactly what the money is for: materials, payroll, equipment or bonding.
- Get the offer in writing: total cost, payment frequency, fixed or percentage, and what happens if you pay early.
- Run the slow-month test: does the payment fit in your worst month of the year?
If your deposits are steady and you need capital for a job, you can apply online with our recommended funder. Applying is free and does not impact your credit. Prefer Spanish? Leer en español.
Frequently asked questions
Is a merchant cash advance the same as a loan?
Not exactly. With a merchant cash advance, the funder buys a share of your future sales and collects it through daily or weekly payments. A loan has an interest rate and a fixed payment schedule. For a contractor, the practical difference is the payment frequency and how it adjusts when your collections drop.
Can I get an advance if my customers hold retainage?
Possibly, because the funder looks at your actual deposits. But retainage cuts what lands in your account while the job runs, so the payment should be sized on what you collect, not what you bill. Explain it when you apply and ask whether the payment can be a percentage of deposits.
Can I get a cash advance for my construction company with an ITIN?
Yes, some funders accept it. Our recommended funder accepts applicants with an ITIN, no SSN needed; other funders require an SSN, so ask before you apply. What matters most is a business account with steady deposits. Talk to an immigration attorney about your situation if you have questions about your status.
What is better for a subcontractor: factoring or an advance?
If your problem is a general contractor who pays late and your invoices are to solid companies, factoring usually attacks the cause better. If your sales are steady and you need capital for several things at once, an advance or working capital may be more practical. Compare both offers in writing.
How fast does the money arrive?
It depends on the option. Sales-based financing is usually the fastest; with our recommended funder, decisions often come in 2 to 4 hours. Factoring usually takes days and an SBA loan takes weeks. Having your bank statements and job list ready speeds up any process.
What if I already have an advance and cannot keep up with the payment?
Talk to your funder before you fall behind and ask to lower the payment, showing your actual deposits and active jobs. Avoid taking a second advance to cover the first; it usually makes the problem worse. Also check whether you can collect an open invoice or the retainage on a finished job sooner.