Why lenders favor the trades
Here is what we see in the bank statements.
A specialty contractor runs a lot of jobs. A service call, a panel upgrade, a re-pipe, a roof repair. Each one is a separate customer and a separate deposit. In a normal month that adds up to dozens of deposits from many sources.
A general contractor looks different. Fewer projects, larger draws, longer gaps. One delayed draw can empty the account.
Underwriters count deposits for exactly this reason. Many deposits from many customers is a steadier business to lend against than a few big ones.
Two more things work in a subcontractor’s favor:
- Two ways to earn. You can sub for a general contractor and also take your own jobs directly from owners. If one side slows, the other can carry you.
- Repair work does not wait. A failed water heater, a dead panel, or a leaking roof gets fixed in any economy. The Bureau of Labor Statistics points to repair and replacement as a main source of demand for roofers.
In our experience, that mix makes the specialty trades hold up better across economic cycles than general contracting.
Where the cash gets tight
Trades businesses rarely have a revenue problem. They have a timing problem.
- You buy materials first. Wire, pipe, fixtures, and shingles are paid for before the job is.
- You pay the crew weekly. Payroll does not wait for the customer.
- You get paid last. A homeowner pays on completion. A general contractor may pay in 30 to 60 days.
- Retainage holds some back. On commercial jobs, part of each progress payment, most often 5% or 10%, is held until the project is substantially complete. Some states cap it; Texas requires 10% on private projects.
The busier you get, the wider that gap becomes. Growth is what strains cash.
What a lender looks at
Beyond the usual three numbers of time in business, revenue, and credit:
- Number of deposits each month. More is better.
- Customer concentration. If one general contractor is most of your revenue, expect questions.
- Daily balances around payroll. Overdrafts on payroll day shrink an offer fast.
- Licenses and insurance. Have them current and ready.
- Existing equipment loans and advances. These come off what you can carry.
Electrician business loans
An electrical contractor’s capital goes into vans, test equipment, and inventory that gets used up on every job: wire, panels, breakers, conduit. Two newer lines of work carry bigger tickets and longer waits: EV charger installs and solar interconnects, where the customer or the utility can take weeks to pay. Equipment financing covers the vans and the tools. A line of credit carries the materials between the supply house invoice and the customer’s check.
Plumbing business loans
Plumbers run on trucks and stock. A service truck that is not loaded with water heaters, fittings, and valves costs money on every call-back. Drain and sewer work adds its own equipment: cameras, jetters, locators. The pattern is the same as the other trades: finance the trucks and the big equipment over their working life, and carry the stock and the crew’s weekly pay on a line.
Roofing company loans
Roofing has the widest gap between paying for a job and getting paid for it. Materials for a full replacement are bought up front. Crews are paid weekly. Insurance-funded jobs pay last, after the adjuster signs off, and commercial work holds retainage. Storm seasons compress all of that into a few weeks of enormous demand. A line of credit sized to a month of materials, plus invoice factoring on commercial receivables, keeps a roofer from turning down work it cannot float.
Trade business loans: what you can get
| Product | Amount | Term | Typical use in the trades |
|---|---|---|---|
| Equipment financing | Up to 100% of cost | Up to 72 months | Trucks, vans, lifts, cameras, jetters |
| Line of credit | Up to $750,000 | Up to 24 months | Materials and payroll between jobs and payments |
| Invoice factoring | $200,000 to $7 million | Per invoice | General contractors and commercial customers that pay in 30 to 60 days |
| Term loan | Up to $5 million | 6 to 36 months | A one-time cost: a shop, a crew expansion, a large job’s materials |
| SBA 7(a) loan | Up to $5 million | Up to 25 years | Buying a competitor or a building |
Amounts and terms are what our primary lender publishes; your offer is sized to your deposits and daily balances.
Matching the tool to the job
Use short money for short gaps and long money for long assets.
- A truck you will run for seven years belongs on equipment financing, not on a 12-month advance.
- A materials order you will be paid for in 45 days belongs on a line of credit, not on a five-year loan.
Getting that backward is an expensive mistake.
Contractor financing requirements
The starting points are the same as for any business: 2 years in business, $250,000 in annual revenue, and a credit score of 600 or higher, with floors that run from 600 to 680 depending on the lender. Equipment financing can start at 1 year with some lenders. Factoring looks at your customers’ credit more than yours.
Have these ready:
- 3 to 6 months of business bank statements
- Your contractor’s license and proof of insurance
- A list of open jobs and what each one is owed
- For a vehicle or equipment, the dealer’s quote
Then check your number with the funding estimator, or see the requirements by product.
Sources
- U.S. Bureau of Labor Statistics: Specialty Trade Contractors, NAICS 238, data extracted October 2, 2026
- BLS Occupational Outlook Handbook: Electricians, Plumbers, Pipefitters, and Steamfitters, and Roofers, 2025 to 2035 projections
- Kapitus: Equipment Financing, checked October 12, 2026
- Levelset: Retainage Guide, for typical retainage percentages and state rules