Key takeaways
- Contractor funding bridges the gap between paying for a job and getting paid for it.
- Match the product to the gap: short timing gaps, recurring gaps, equipment, or long-term growth each have a best fit.
- Fast funding costs more. Always compare the total payback to the profit on the job before you sign.
- A growing number of states require written cost disclosures, and some now require brokers to register.
What contractor funding is
Contractor funding is business capital for licensed contractors: roofers, HVAC companies, electricians, plumbers, tree services, general contractors, and every trade in between. It exists because construction has a built-in timing problem. You buy materials, pay crews, and rent equipment before owners, GCs, insurance carriers, or homeowners pay you.
The right funding lets you take bigger jobs, hire before peak season, and keep payroll steady while invoices clear. The wrong funding, or the right funding at the wrong price, can eat the profit on the jobs you already have. That's why this guide is as focused on cost as it is on options.
Types of contractor funding
| Option | Best for | Typical speed | Typical cost |
|---|---|---|---|
| Working capital / MCA | Short timing gaps, fast-moving jobs | Often 1–3 business days | Highest; usually priced with a factor rate |
| Business line of credit | Recurring, unpredictable gaps | Days to a few weeks | Moderate; interest on what you draw |
| Equipment financing | Trucks, lifts, and machinery | Days to 2 weeks | Moderate; the equipment secures it |
| Invoice factoring | Commercial invoices waiting 30–90 days | Days once set up | A fee on each invoice |
| Bank or SBA loan | Long-term growth and larger projects | Weeks to months | Usually lowest, if you qualify |
A merchant cash advance isn't a loan: a funder buys a share of your future receivables and collects it from your deposits. It's usually the fastest option and the most expensive, and it often includes a UCC filing and a personal guarantee. For a deeper comparison, read our business funding options guide and how working capital works.
What it really costs
Fast funding is often priced with a factor rate. Multiply it by the amount you receive to get your total payback. A $50,000 advance at a 1.30 factor rate means $65,000 paid back, a $15,000 cost, whether you repay in four months or eight.
The one test that matters: the job the money funds should earn clearly more than the funding costs, and your account should be able to carry the payments while you wait to get paid. Try it in our free contractor funding calculator.
Before you sign any offer, get these in writing: the amount you'll actually receive, the total payback, the payment amount and schedule, every fee, any collateral or guarantee, and what happens if you pay early.
How to qualify
- Time in business: most of our funding partners look for 6+ months; banks often want 2+ years.
- Monthly deposits: most partners look for $10,000+ in business deposits.
- Bank statements: your last 4 months, with few negative-balance days or returned payments.
- License: an active contractor license where your state requires one.
- Credit: all profiles considered for many products; better credit usually means better pricing.
Get the full checklist and a 30-day prep plan in how contractors qualify for funding.
Funding by trade
Every trade gets paid differently, so every trade has a different cash gap.
Funding by state
Funding Expansion works with licensed contractors nationwide. Licensing and financing rules vary by state, so we've written guides for some of the busiest construction markets.
State disclosure and registration laws
A growing list of states, including California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah, and Virginia, now require commercial financing providers to give written cost disclosures before you sign, usually for deals below a set dollar amount. Some states also require providers and brokers to register. Texas, for example, requires providers and brokers of sales-based financing to register with its Office of Consumer Credit Commissioner by December 31, 2026.
These laws help you. The disclosure puts the total cost on one page, which makes it much easier to compare offers that are priced differently. Rules change, so always confirm what applies in your state.
How to choose a funding broker
- A real address and phone number on their website and materials.
- No upfront fees to apply or to find offers.
- The total payback in writing before you sign, plus a clear explanation of UCC filings and personal guarantees.
- Multiple funding partners, not a single product pushed on everyone.
- Honesty about fit, including telling you when a bank loan would be cheaper.
- Registration where required by your state.
See what your business qualifies for
One application, 15+ funding partners compared, and the full cost in writing before you sign. Free to apply, no obligation.
Frequently asked questions
What is contractor funding?
Business capital for licensed contractors, such as working capital, lines of credit, equipment financing, and invoice factoring, used to cover payroll, materials, and equipment while waiting to get paid.
How fast can a contractor get funded?
Working capital can fund in as little as 24 to 48 hours after approval and signing. Lines of credit and equipment financing usually take days to a few weeks, and bank or SBA loans often take weeks to months.
Can I get contractor funding with bad credit?
Often, yes, for short-term products. Many funding partners weigh monthly deposits more than credit, though lower scores usually mean higher costs.
How much funding can a contractor get?
It depends on your monthly deposits, time in business, and existing obligations. Through our funding partners, offers range from $10,000 to $2,000,000.
Do you work with contractors in every state?
Funding Expansion works with licensed contractors nationwide, subject to each funding partner's requirements and applicable state rules.
Is a merchant cash advance a loan?
No. It's a purchase of your future receivables, repaid from your deposits. It's usually faster and more expensive than a loan, so compare the total payback carefully.
This guide is general information, not legal, tax, or financial advice. Laws change; confirm current requirements in your state. Funding Expansion is a commercial funding broker, not a lender. Funding is provided by third-party funding partners and is subject to qualification.