Best revenue-based financing for construction companies

The best revenue-based financing for a construction company is the one built around how you actually get paid: progress billing, retainage, and strong months followed by thin ones. For fast capital approved on your deposits, our recommended funder is Merchant Fund Express. If your collections swing hard, look for a percentage-of-deposits payment. If your problem is approved invoices that pay slowly, factoring fits better. And if you have a track record and time, an SBA 7(a) Working Capital Pilot line usually costs less.

Revenue-based financing is set by what lands in your account, not just your score. That helps a lot of contractors who do great work but have short credit. Here we compare six options on clear criteria. For a full explainer on the product itself, read revenue-based financing for construction.

The 6 best options for construction companies and contractors

1. Merchant Fund Express (recommended funder). Best when you need money soon to buy materials, cover two weeks of payroll before the first draw, or take on a bigger job. It reviews your sales and deposits as well as credit, works with scores from FICO 500, handles amounts from $5,000 to $5,000,000 and often decides in 2 to 4 hours. In most cases it doesn't require collateral. It accepts applicants with an ITIN (no SSN needed), applying is free with no impact to your credit, and it offers Spanish-speaking support.
2. Percentage-of-deposits financing. Best if one month you collect a lot and the next almost nothing. You pay a percentage of what comes in, so the payment drops when a job gets delayed. Ask whether there's a minimum payment and how it's calculated.
3. Construction invoice factoring. Best for subs working for GCs, developers or government agencies who have approved invoices that are slow to pay. The factoring company advances part of the invoice and collects from the customer. Not every factor buys progress billings or retainage, so ask first.
4. Deposit-based line of credit. Best for companies with two or more years that buy materials between jobs. You draw what you need and replenish it when you get paid.
5. SBA 7(a) Working Capital Pilot line. Best for established contractors who can deliver financial statements and receivables and payables reports on time. According to the SBA, it's a monitored line of up to $5,000,000, with a maximum term of 60 months, for businesses with at least a year of operations that want to perform on large contracts or borrow against receivables. Its rates are capped.
6. CDFI or community bank. Best if you want moderate cost and coaching. CDFIs are certified by the Treasury Department to serve communities with limited access to credit, and some have bilingual staff.

How we chose. No ratings, scores or invented statistics. We compare only on verifiable criteria: speed, minimum time in business, minimum credit, ITIN or no-SSN acceptance, documents, amounts and collateral. On this page we give extra weight to how each option handles uneven job collections. The full method is in how we rank business funding options.

Comparison table for construction

"Ask" means we don't assume it: confirm with the funder before you sign.

Five questions before you sign any offer:

• Is the payment daily, weekly or a percentage of my deposits?
• What happens to the payment if a job stalls for permits or weather?
• Is there a personal guarantee, and what exactly does it cover?
• Can I pay early, and if I do, does the cost change?
• Can you walk me through the contract, in Spanish if I prefer, point by point?

Why construction needs a different kind of payment

A taco shop makes deposits every day. A construction company doesn't. These are the patterns that should drive your decision:

• Progress billing. You invoice at 25%, 50% and 75% complete, and each payment depends on the GC or owner approving the pay application.
• Retainage. The customer holds back a percentage of each payment until the job is done. That money is yours, but you won't see it for months.
• Materials up front. You often pay for concrete, lumber or pipe before the first draw.
• Weekly payroll. Your crew gets paid every Friday, even if the customer pays in 45 days.
• Seasons. In cold states work slows in winter; elsewhere, rain or heat changes the pace.

That's why a fixed daily payment is risky for many contractors: it hits the same in a week when nothing comes in. Before you sign, ask to see your projected payments against your deposits from the last six months, and focus on your worst months, not the average.

Which one to choose by contractor type

• Subcontractor (drywall, painting, flooring, concrete) billing a GC: factoring if your approved invoices pay slowly, or deposit-based capital for materials and payroll while you wait.
• Residential remodeler collecting deposits from homeowners: your deposits are steadier; a deposit-based line or weekly-payment financing is usually enough.
• Commercial contractor with large contracts: if you have a year or more and clean books, get a quote on an SBA 7(a) Working Capital Pilot line and use fast capital only to cover gaps.
• Government contractor: factoring often fits because the customer is reliable but slow. Check the contract's rules on assignment of payments.
• New company with little history: a CDFI or a funder that reviews a few months of deposits; document every job with a contract and photos.

If what you need is a machine, not working capital, compare equipment financing for construction instead. For a revolving option, see our guide to a construction line of credit.

The SBA and the 2026 citizenship rule

If you qualify, an SBA loan or line usually costs less than any fast option. But keep two things in mind:

• Time and reporting. The Working Capital Pilot line requires timely financial statements, receivables and payables aging reports, and inventory reports where applicable. If your books are behind, catch them up first.
• Ownership. Since March 1, 2026 (SBA Procedural Notice 5000-876626 and SOP 50 10 8), 100% of the direct and indirect owners of a 7(a) or 504 applicant must be U.S. citizens or U.S. nationals whose principal residence is in the U.S. Lawful permanent residents can no longer hold any share.

This isn't immigration advice. If you have questions about your own situation, talk to an immigration attorney. If the rule leaves you out, deposit-based options, factoring and CDFIs are still available.

How to prepare, and mistakes to avoid

1. Deposit everything into the company account. Job checks, customer deposits and cash payments. What doesn't reach the bank doesn't count.
2. Keep a list of active jobs with customer, contract amount, amount billed and retainage pending. Show what's coming.
3. Keep your license and insurance current. Contractor's license, general liability and workers' comp where it applies.
4. Avoid negative-balance days. They're one of the signals that worry funders most.
5. Ask for what the job needs, not the maximum you're offered.

Common mistakes: using fast capital to buy a machine you'll be paying off for years; signing a daily payment when you get paid every 45 days; and stacking financing to cover another payment. If a payment is squeezing you, work with your current funder on lowering the payment. When your bank statements are ready, you can apply with Merchant Fund Express; it's free and won't affect your credit. Prefer Spanish? Leer en español.