Funding and Insurance Options for Contractors

Some lenders work with lower credit bands, though options may be more limited and pricing is often higher. Credit is usually one factor among several, since revenue, time in business, and collateral like equipment or invoices often matter too. Checking your options doesn't commit you to anything.

There's no single answer. The right fit typically depends on what you're funding. Equipment purchases often point to equipment financing, day-to-day gaps to working capital or a line of credit, and slow-paying customers to invoice factoring. Larger, longer-term plans may fit SBA programs.

Often, yes. Equipment financing is commonly used for trucks, machinery, and heavy equipment, and the equipment itself typically serves as collateral. Lenders may ask for a quote or invoice for the equipment as part of the process, and both new and used equipment may be eligible depending on the lender.

Yes. Factoring is often used in trades where customers pay on 30-60 day terms. You typically receive an advance on the invoice and the balance, minus fees, when your customer pays. Some factors have specific rules around construction progress billing, so terms vary by provider.

It depends on your trade, your state, and your contracts. General liability is often the baseline, workers comp typically applies once you have employees, and commercial auto covers business vehicles. Individual jobs may add requirements like bonds, builder's risk, or higher liability limits.

In most states, workers compensation is generally required once you have employees, though rules vary by state and classification. Some general contractors also require subcontractors to carry their own coverage regardless of state minimums, so check your contracts as well as your state's requirements.

A surety bond is a three-party agreement where a surety company backs your obligations to a project owner or licensing authority. Bid, performance, and license bonds are the common types in construction. Bonds are underwritten differently from insurance, so financials, experience, and track record often factor in.

Yes, subcontractors may qualify for many of the same options as general contractors, including equipment financing, working capital, lines of credit, and factoring. With factoring, the credit of the party paying your invoices often matters as much as your own.

Typically, yes. Many lenders prefer two or more years in business, though some options may be open to newer companies, often at different pricing or amounts. Strong recent revenue can sometimes offset a shorter track record.

Often. Contractors commonly line up equipment financing or a line of credit to gear up for awarded work before mobilization. Having the contract, bid documents, or purchase orders ready may help lenders understand the opportunity.