Does your construction company have adequate financing? Many businesses unnecessarily struggle as they search for financing or never explore financing options from more than one financial institution. Unfortunately, this means that many businesses that could benefit from versatile financing options never get to take advantage of them. What are some of the types of financing that your construction company might be able to benefit from?
3 Types of Financing to Help Your Construction Company
- Bank Loans: Lines of credit and bank loans are two of the most common options available to the average construction company. Your loan might offer you a set amount of funding for a specific period of time and interest rate. In contrast, lines of credit can give you a versatile funding option where you can borrow what you need as you need it and then pay down the balance. However, bank loans and lines of credit do need to be applied for and you might need to search for a bank that is a good fit for your construction company.
- SBA Loans: Small Business Administration (SBA) 7(a) loans are designed to help businesses that need $350,000 or less in funding. You will be approved for the loan based on your Small Business Scoring Service Liquid Credit score, which is calculated by FICO (similar to consumer credit). There are other SBA loan programs that can give your construction company up to $5 million depending on your needs.
- Equipment Financing and Leasing: Many companies think about financing as traditional loans, but it can also look like equipment leasing options. When your construction company is in need of large, expensive equipment, financing it can be a great option. Many companies offer 0% financing for a set period of time so that you can pay them down without incurring any penalties.
If you aren’t sure how your funding sources could impact your tax situation or construction company finances, you can work with your accountant at MKS&H to get an idea of what to expect. We are always here to support you.
Get the Funding You Need for Your Construction Company with MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry, including construction. We can work with you to improve your company and make sure that it is financially secure now and in the future. Contact us today for a consultation.
About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.