We all know that starting, running and succeeding with a contracting business isn’t easy.
With so many moving parts in running the business, it can sometimes be hard to keep up with everything you need to make it succeed. But as a business owner, we know that you continue to push through to make your company succeed.
As you pile on successes, you start to take on more profitable and more ambitious projects. But those projects require larger and stronger equipment.
And it’s possible you might not have all the cash on hand to buy the equipment you need to get the job done, so what are your options?
In order to complete the job, you’ll have to get the equipment you need to operate at full capacity. And sometimes that just means getting cash in hand from a lender or striking a deal with a manufacturer.
Your situation is going to be unique, so take a look at these possibilities and see if contractor loans make the most sense for your business.
1. Get a Bank Loan or SBA Loan
One of the most common types of advice you’ll see is to go to the bank to get a loan or apply for a loan from the Small Business Association (SBA).
Now this could be a completely valid option for some businesses.
But more likely? You won’t qualify and you won’t get the money when you need it, which is probably right now.
The only time it makes sense to get a loan from the bank or SBA is when you have near perfect credit, have been in business for years, and have a LOT of time to waste on waiting to hear back (weeks at a time), going through paperwork, etc., just for a chance at a loan.
At the end of the day, a bank or SBA loan is probably one of your best options, but it’s rare that most businesses will be able to work with a bank successfully.
If this isn’t you, fear not: there are other options.
2. Equipment Leasing + Contractor Financing
It’s exciting to be able to land an ambitious and profitable job. But sometimes in those cases, it’s not just about buying a big new fancy piece of heavy equipment.
You probably also have to hire more people and purchase special supplies, all on top of the big piece of equipment.
Rather than using contractor loans to cover all of your expenses, sometimes it makes more sense to split them up into two unique transactions:
A transaction to lease your equipment and contractor loans to finance everything else.
Most equipment leasing options are better for you and the lender, making it more viable for both sides. This leaves the rest of the financing needs to fall on other financing options for you as a contractor.
3. Using Collateral for Financing
Using collateral to finance a project is talked about less often, but it’s an option for some.
You can use your own construction fleet or even real estate assets as pieces of collateral to secure a deal that might have been impossible otherwise.
This looks really appealing to a lender when they recognize that they’ll get some new equipment or real estate property to sell if things go under.
But if you’re confident about your ability to pull the project through, this could be a perfect option for you.
So what are you waiting for? Don’t you have a big project to finance?
The last thing you want to do is assume that you don’t have the equipment or resources necessary to pull it off, and turn it down as a result.
Figure out where your finances are and determine which option is best for you.
Contractor loans might be the best option for you.
Call 866-458-4777 to discuss Growing Your Contracting Business With These 3 Financing Options.