So, your construction company has just landed a huge proposal and you’re growing. This is a time to celebrate, but also start thinking about what’s next. You might require a larger amount of money before your next job comes about in order to fund the areas necessary. The new bid may not cover everything you need like more employees or extra equipment. That being said, it is probably time to start talking about business funding.
Myths and Misconceptions About Business Funding for Contractors
There are so many myths and misconceptions about business funding for contractors it can be hard to know what steps to take. Today, we’re taking a look at the most common myths associated with business funding so you have a better understanding of what to look out for.
Banks are the best and only place to get a loan
For years, banks were really one of the only options to get business loans. And, if a bank turned you down, you really had nowhere else to go to help your business. Today, however, there are so many alternative funding sources to turn to. Finance Factory is one of them. Besides, a lot of banks require a need for $250,000 or more in order to proceed with the loan. But not every business needs that much money. As a contractor, like a lot of small businesses, you might not even have a need for $30,000. Finance Factory can offer different financing options that work best for your needs. More small companies are seeking funding from alternative lenders simply because of the speed and tailored plans they can offer.
Borrow as Much as You Can
Has anyone ever told you, “borrow as much as you can when you first meet with the financer?” Well, those who follow that mindset might have more money to work with, but they are also saddled with higher than necessary payments. Plus, don’t forget – interest adds up over time. The money you end up spending making payments could be spent elsewhere like on equipment and manpower.
Credit Score is the Most Important
If you’re thinking of going straight to a bank for your business financing, there is a good chance your credit score will be scrutinized. This also includes your personal credit. One of the best things about alternative funding sources like us at Finance Factory is that we don’t zero in on one strict aspect of anything. Plus, we can look at your personal and business credit completely separate. There are a variety of things to look at instead of credit: Business plans, profit, expected profit, etc. But we should mention that, while having not so great credit won’t disqualify you, it doesn’t hurt to consistently work on improving.
Loans for Construction Take Forever to Obtain
When looking for loans from traditional banking systems or straight from the SBA, it could take months or more for a business loan to go through. Working with an alternative funding source, you could get loans for your construction business extremely fast. With Finance Factory, business funding for contractors can be approved for large loans in just several days to a week.
My Business is Too Small/Too Big
A lot of contractors miss out on wonderful opportunities because they’re afraid to ask about the size of not only their loan but their overall operation. Alternative lenders do not look at the size of your business or loan application and think “oh no, this guy wants too much, or doesn’t have enough people.” Alternative lenders look at your overall ability to pay back the loans they provide. If you provide the right information about your business plan, everything should fall into place.
I Don’t Need a Prepared Business Plan
Preparation is key when it comes to all things business related. Especially for business funding for contractors. There is a lot to go over. That is why having a planned, well-thought-out business plan comes in handy when talking to alternative funding sources about funding your contracting business. You’re basically asking someone to take a chance on you, so why not do everything you can to present the best version of yourself and your company. Take some time to develop and write down your goals and needs. Come prepared with information on how well (or poorly) your business has been doing and your projections for the year. Make us believe in your company. Your plan does not have to be super fancy, but it should appear planned.
At Finance Factory, we want to help as many contractors as we can. By helping us understand your goals, your business needs, and what you’re looking for in a loan from us, we’ll work with you every step of the way to help you. We’ve helped many small businesses in the past reach their business goals through our key elements test to assess businesses. If you have more questions about the myths and misconceptions about business funding for contractors or would like to meet with us about a loan, reach out! We’d love to work with you.
Interested in finding funding for your business? Finance Factory would love to help! If you’re looking to fund your business within the next 30 to 90 days for $25,000 to $500,00 and have a credit score of 660 or better, let’s chat! Get pre-qualified right now with our quick-step pre-qualification form! And don’t worry, this will not result in a hard credit inquiry of sensitive information. We just want to learn more about you and your business. Click below to get started!