Can a construction company qualify for a merchant cash advance?

Yes — but through ACH/bank-statement programs, not the traditional card-split model. Most construction revenue comes in via check, ACH transfer, or wire, not credit card swipes. ACH-based MCAs underwrite from 3–6 months of bank statements rather than card processing volume. Typical minimums: $20,000–$25,000/month in deposits, 12+ months in business, and a contractor's license in your state. Personal credit as low as 550 can qualify, though 600+ gets better factor rates.

What factor rate should I expect as a contractor?

Construction companies typically see factor rates of 1.25–1.45, compared to the general MCA market range of 1.10–1.50. The higher floor reflects project-based revenue volatility — funders view construction as moderate-to-high risk because income is lumpy (large deposits followed by gaps) rather than steady daily sales. Established contractors with 2+ years in business, consistent deposits, and 650+ credit can negotiate toward 1.20–1.28.

How does MCA repayment work when I don't swipe cards?

Through fixed daily or weekly ACH debits from your business checking account. The funder sets a fixed payment (say, $400/day or $2,800/week) based on your average daily deposits. Unlike the traditional card-split model, payment does not fluctuate with your daily revenue — it's a fixed debit until the total repayment amount is met. Some funders offer modified holdback schedules that align withdrawals with your project payment cycles (bi-weekly or monthly).

What documents do I need to apply?

Typically: 3–6 months of business bank statements, contractor license (active, in good standing), government-issued ID, one page on the project(s) you're funding (contract or LOI preferred, not required), voided business check, and basic business formation documents (LLC operating agreement or articles of incorporation). Tax returns are not always required for amounts under $150,000.

Which MCA providers work best for construction?

Fora Financial ($5K–$1.5M, 500+ credit, 6+ months) and National Funding ($5K–$500K, 600+ credit, 6+ months) handle smaller-to-mid-size construction advances quickly. Kapitus ($50K–$5M) and Libertas Funding ($50K–$5M) serve larger contractors with 2+ years in business and $250K+ annual revenue, offering larger advances at competitive factor rates (1.10–1.30 for strong profiles).

Are there cheaper alternatives to an MCA for construction?

Yes — if you have time. A business line of credit (8–25% APR) is cheaper, but most banks require 2+ years of clean financials and 650+ credit. Equipment financing (6–25% APR) works if you're buying machinery, not covering materials or payroll. SBA 7(a) loans are the cheapest option (9.75–13.25% APR, size-tiered) but take 45–75 days. For a materials buyout that needs to close in 3 days, none of those work — which is when an MCA's speed justifies its cost.

Merchant Cash Advance for Construction Companies: 2026 Guide

Construction is one of the most cash-intensive industries in the United States — and one of the most misserved by traditional financing. You spend money months before you collect it, suppliers want payment within 15–30 days, and your bank’s loan approval takes longer than your project start date. A merchant cash advance bridges that gap, but getting one right for a construction business requires understanding how the product actually works for contractors.

Why Construction Cash Flow Is Different

Most businesses have relatively steady daily revenue. Restaurants swipe cards all day. Retailers process transactions continuously. Construction doesn’t work that way.

On a typical commercial project, you might invoice three times: a mobilization payment (10–15%), a progress payment at 50% completion, and a final payment at closeout — less 5–10% retainage held for 30–90 days after punch list. Each payment might take 30–45 days to arrive after invoicing. Meanwhile, your material costs hit on day one and payroll runs every two weeks whether the project is moving or not.

That structure creates a predictable gap: high early outflows, delayed inflows, fixed operating costs throughout. The contractors who grow are the ones who solve this gap cheaply. The ones who struggle are the ones who run out of options mid-project.

How MCAs Work for Construction (ACH-Based, Not Card-Split)

The traditional merchant cash advance was designed for businesses with heavy credit card volume. The funder splits 10–20% of daily card transactions until the advance is repaid. A restaurant or retail store has that. A general contractor collecting wire transfers and ACH payments from project owners does not.

ACH-based MCAs — sometimes called revenue-based MCAs or bank-statement-based advances — solve this. Instead of splitting card swipes, the funder:

Reviews 3–6 months of business bank statements to assess average monthly deposits
Sets a fixed daily or weekly ACH withdrawal from your business checking account
Continues debiting until the total repayment amount is collected

Because repayment comes from the same account that receives all your deposits — regardless of how clients pay you — construction companies qualify on the same terms as any other business. Your check-paying general contractor doesn’t disqualify you.

What It Actually Costs: Three Real Scenarios

Scenario	Advance	Factor Rate	Total Repayment	Cost	Estimated Term
Materials buyout for $250K project	$75,000	1.30	$97,500	$22,500	7–9 months
Payroll bridge (winter slowdown)	$40,000	1.35	$54,000	$14,000	5–7 months
Equipment deposit + first-month lease	$25,000	1.40	$35,000	$10,000	4–5 months

Scenario 1 — Materials buyout: A residential builder lands a $250,000 renovation contract requiring $75,000 in lumber and structural materials within 10 days of project start. Their bank would take 4–6 weeks. They take a $75,000 advance at a 1.30 factor rate — total repayment $97,500, cost $22,500. That’s a fixed daily ACH of about $575 over roughly 170 business days (~8 months). Their margin on the job is $55,000–$70,000. The math works.

Scenario 2 — Payroll bridge: A specialty electrical contractor in a northern state loses 50% of revenue from December through February but carries a crew of 8 to stay competitive in spring. A $40,000 advance at 1.35 covers 6–8 weeks of payroll. Total cost $14,000, repaid through spring as projects ramp up.

Scenario 3 — Equipment deposit: A site contractor needs a $25,000 deposit on a concrete pump rental for a 3-month commercial project. Equipment financing for a rental deposit doesn’t exist — the bank won’t finance something you don’t own. An MCA funds the deposit in 2 business days.

In all three cases, the question isn’t “is this cheap?” It’s “does the funded activity generate more than the advance costs?” If yes, the MCA is a rational tool.

Construction MCA Providers: Compared

Provider	Advance Range	Factor Rates	Min. Credit	Min. Time in Business	Notes
Fora Financial	$5K–$1.5M	1.18–1.48	500+	6 months	Fastest for smaller advances; handles newer contractors
National Funding	$5K–$500K	1.10–1.20	600+	6 months	Competitive rates for established profiles; also offers equipment financing
Kapitus	$50K–$5M	1.10–1.50	625+	24 months	Best for large advances; slower underwriting but can do $500K+
Libertas Funding	$50K–$5M	1.05–1.30	630+	24 months	Strongest factor rates for high-revenue contractors ($75K+/month); transparent terms

Compare all 24 providers in the directory →

Best fit by situation:

New contractor (6–18 months): Fora Financial handles lighter time-in-business requirements with factor rates as low as 1.18 for strong profiles.
Mid-size established contractor ($20K–$80K/month revenue): National Funding offers the most competitive factor rates in the 1.10–1.20 range without requiring 2+ years.
Large advance ($150K+): Kapitus or Libertas — both handle $500K+ with longer-term underwriting and better rates for strong-revenue construction businesses.

How to Qualify: What Funders Actually Look At

Construction companies are underwritten differently than retail businesses. Funders expect project-based deposit patterns — you don’t need to explain why you had $0 in week 2 followed by $85,000 in week 3. What they look for:

Bank statements (3–6 months):

Average monthly deposits of $20,000–$25,000+ (some funders go as low as $15,000)
No more than 5–7 NSF (non-sufficient funds) incidents in the period
No active bankruptcy or pending judgments

Business documents:

Active contractor license in your state (required — this is a dealbreaker if expired)
1+ year in business as registered entity (12 months minimum; 24+ for larger advances)
Personal credit 550+ (600+ for competitive rates; 625+ for Kapitus, 630+ for Libertas)

Project context (helpful, not always required):

Copy of signed contract or letter of intent for the project being funded
Brief description of the funding need and how it will be repaid

You do not typically need tax returns for advances under $150,000. Funders rely on bank statements and the deposit patterns they reveal.

Red Flags to Watch For

No stated factor rate in the agreement. Legitimate funders put the factor rate, total repayment amount, and holdback percentage in writing. Verbal quotes only, or documents that describe cost as a “fee” or “daily rate” without a clear factor, are a warning sign.

Factor rate above 1.50. The mainstream MCA market caps around 1.49 even for high-risk borrowers. Rates above that are associated with distressed borrowers, stacking situations, or predatory providers.

Fixed daily debits that don’t match your revenue cycle. If you invoice monthly and collect on net-30, a $600/day ACH debit is going to create problems during the first 30 days before your project payments arrive. Ask whether the funder offers weekly debits or a modified payment schedule aligned to your project cycle.

Stacking language. If the advance agreement prohibits you from taking additional financing without permission, you’re locked in. If it requires you to notify existing funders of new advances, that’s standard. Read the cross-default provisions before signing.

Use the MCA cost calculator to model your specific advance amount and factor rate. Compare construction-friendly providers in the directory, or check whether an MCA is the right tool with the 60-second funding quiz.