Merchant Cash Advance for Construction Companies
Construction is a feast-or-famine industry. You might have $2 million in signed contracts but only $20,000 in the bank because the last three projects haven't paid out yet. Merchant cash advances have become a lifeline for construction companies facing the gap between winning work and getting paid for it.
The Construction Cash Flow Problem
Construction has one of the worst cash flow cycles of any industry:
- You bid and win a project — But you need materials NOW
- You buy materials and start work — Out of pocket for $50,000-$500,000+
- Progress billing takes 30-60 days — If the GC or owner pays on time
- Retainage holds back 5-10% — You don't see that money for months
- Change orders create delays — Scope changes mean delayed payments
- Weather and permitting — Uncontrollable delays that cost money but don't generate revenue
The result: construction companies frequently have millions in receivables but can't make payroll next Friday.
What Construction Companies Use MCA Funding For
| Use Case | Typical Amount |
|---|---|
| Materials for new project | $25,000 – $200,000 |
| Payroll bridge between progress payments | $15,000 – $100,000 |
| Equipment rental/purchase | $10,000 – $500,000 |
| Bonding requirements | $10,000 – $100,000 |
| Subcontractor payments | $25,000 – $250,000 |
| Insurance premiums | $10,000 – $50,000 |
| Bid deposits | $5,000 – $50,000 |
| Seasonal downtime cash | $15,000 – $75,000 |
| Vehicle fleet maintenance | $10,000 – $75,000 |
Why MCAs Work for Construction
Speed Matches the Industry
When you win a project that starts Monday, you need materials by Wednesday. MCAs fund in 24-48 hours — banks don't even start reviewing for 2 weeks. See our fast business funding guide for all speed-first funding options.
Revenue Fluctuations Don't Disqualify You
Construction revenue is inherently lumpy — big deposits from progress payments, quiet periods between projects. MCA lenders understand this and evaluate based on average deposits, not perfect consistency.
Credit Isn't the Focus
Many contractors have imperfect credit due to the cyclical nature of the industry. MCAs focus on your bank deposits, not your credit score.
No Collateral Needed
Unlike equipment financing, MCAs don't require you to pledge equipment, vehicles, or property. Your future revenue is the basis — keeping your assets free for bonding and other needs.
Qualification for Construction MCAs
| Requirement | Minimum |
|---|---|
| Time in business | 6+ months (with licenses) |
| Monthly revenue | $15,000+ in bank deposits |
| Credit score | No minimum for many lenders |
| Contractor license | Active and current |
| Type | GC, sub, specialty — all qualify |
What Makes a Construction Company a Strong Candidate?
- Signed contracts showing upcoming revenue
- Consistent monthly deposits over 4+ months
- Active contractor license(s)
- Current insurance (general liability, workers' comp)
- Clean bank account (minimal overdrafts)
Construction MCA Costs
| Monthly Revenue | Typical Advance | Factor Rate | Total Cost |
|---|---|---|---|
| $25,000 | $25,000 – $40,000 | 1.22 – 1.32 | $5,500 – $12,800 |
| $50,000 | $50,000 – $80,000 | 1.18 – 1.28 | $9,000 – $22,400 |
| $100,000 | $100,000 – $175,000 | 1.15 – 1.25 | $15,000 – $43,750 |
| $200,000+ | $200,000 – $400,000 | 1.12 – 1.22 | $24,000 – $88,000 |
MCA vs. Other Construction Funding Options
| Option | Speed | Credit | Best For |
|---|---|---|---|
| MCA | Same day – 48h | None | Fast cash, bad credit, flexibility |
| Construction Line of Credit | 1-4 weeks | 650+ | Ongoing project funding |
| Equipment Financing | 3-7 days | 550+ | Buying specific equipment |
| Invoice Factoring | 24-48h | Client's credit | Getting paid on completed work faster |
| SBA Loan | 2-3 months | 650+ | Major expansion, real estate |
| Working Capital Loan | 1-3 days | 550+ | Short-term operational gaps |
Tips for Construction Companies Getting MCAs
- Time your application strategically — Apply when your bank statements show strong deposits (after large progress payments), not during a slow gap
- Have contracts ready — Showing signed contracts for upcoming work strengthens your application, even if the money hasn't hit your account yet
- Keep business and personal separate — Essential for clean underwriting
- Don't over-leverage — Daily MCA payments need to be sustainable even during slow months between projects
- Consider project timing — If a big payment is coming in 2 weeks, a 2-week bridge might be all you need — ask about shorter-term options
- Use a broker — A broker like FSE knows which lenders are comfortable with construction's lumpy cash flow
How FSE Helps Construction Companies
FSE understands construction financing challenges:
- 50+ lenders — Including those specializing in construction and trades
- $20K to $2M — From material purchases to major project funding
- 24-48 hour funding — Fast enough to start the project on time
- Bad credit OK — Revenue and contracts matter more than credit scores
- Lumpy revenue understood — We work with lenders who know construction cash flow isn't steady
- No upfront fees
Get Your Construction Funding Quote →
Need funding in a specific location? Explore our guides for Denver and Nashville.
Frequently Asked Questions
If your business operates in a specific industry, specialized funding may be a better fit. Explore construction company financing to see options tailored to your needs.
Can a subcontractor get an MCA?
Yes. Subcontractors, general contractors, specialty contractors, and even independent tradespeople can qualify for MCAs. A construction business line of credit is another option worth exploring. The key is having 6+ months of bank deposits showing $15,000+ per month in revenue.
How much can a construction company get from an MCA?
Typically 1-2x monthly revenue. A construction company depositing $100,000/month might qualify for $100,000-$200,000. Larger companies with higher revenue can access up to $2M through FSE's lender network.
Will having seasonal gaps hurt my MCA application?
Construction lenders understand seasonality. They'll look at your average monthly deposits across all 4 months of statements. If 3 months are strong and 1 is slow, most lenders average it out. Apply during or just after a strong period.
Can I use MCA funds for a construction bond?
Yes. MCA funds can be used for any business purpose, including securing performance bonds, bid bonds, or payment bonds. However, note that having an MCA doesn't affect your bonding capacity since it's not a traditional loan.
Is equipment financing better than an MCA for buying construction equipment?
Usually, yes. Equipment financing uses the equipment as collateral. For heavy machinery specifically, see our guide on construction machinery finance, resulting in better rates and longer terms. But if you have bad credit, need speed, or want funds for equipment AND other expenses, an MCA is more flexible.
Can I get an MCA between projects?
Yes, but your bank statements matter. If your last 4 months show consistent deposits, you can qualify even if you're between active projects. Having signed contracts for upcoming work also helps.
What if a project gets delayed and I can't make MCA payments?
Contact your funder immediately. Project delays happen constantly in construction, and most funders will work with you on restructuring. The worst thing you can do is ignore the payments — communication is key.
Do I need a contractor's license to get an MCA?
Not for the MCA itself — MCA qualification is based on revenue, not licensing. However, having active licenses demonstrates legitimacy and can help with the application. Operating without required licenses is a legal issue separate from funding.
Contractors: stop letting cash flow hold up your projects. FSE gets you funded in 24-48 hours so you can bid bigger, build more, and grow faster.