Revenue-Based Financing for Construction
June brings $150,000 in project deposits. January has $30,000. Revenue-based financing ties payments to your actual deposits, automatically adjusting to the project and seasonal variation that defines construction business.
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Revenue-Based for Construction Patterns
Revenue-based financing calculates payments as a percentage of your deposits. Since construction deposits follow project and seasonal patterns, payments automatically match your cash flow reality.
Project Deposit Match
An 8% revenue share on a $50,000 project deposit means $4,000 payment. That same 8% on a $10,000 slow month means only $800. Built-in project flex.
Seasonal Protection
Winter slowdowns mean lower deposits. Payments drop proportionally. No stress about hitting fixed obligations during slow seasons.
Project Timing Alignment
Big project payment arrives? Larger payment you can afford. Between projects? Payments adjust to slower deposits.
Growth Scaling
As your construction business grows and deposits increase, financing naturally repays faster through proportional payments.
Why Fixed Payments Hurt Contractors
Project-based and seasonal revenue variation is construction reality. Financing should acknowledge this.
Fixed Payments vs. Project Reality
A $5,000 monthly payment is manageable when $80,000 deposits arrive. It is crushing during $15,000 slow months.
Seasonal Mismatch
Fixed payments continue at full amount through winter when revenue drops 50-70% from summer peaks.
Project Timing Variation
Projects pay when they pay. Some months have multiple large deposits; others have gaps between projects.
Weather Impact
Rain delays, snow weeks, and weather variations affect project timing and revenue. Fixed payments ignore this reality.
Growth Constraints
Taking on more projects increases revenue but also risk. Fixed payments do not scale with business growth.
Cash Flow Stress
Constant worry about hitting fixed payment amounts during variable revenue periods creates operational stress.
Revenue-Based Financing Process
From application to funding in days.
Application
Complete online application with business information.
15 minutes
Deposit Review
Provide 4-6 months of bank statements showing deposit patterns.
Upload documents
Offer
Receive offer with funding amount, factor rate, and revenue share percentage.
24-72 hours
Funding
Accept and receive funds. Payments automatically track with your deposits.
Same or next day
Payments That Match Construction Reality
Revenue-based financing ties payments to your actual deposits. Big project payment months handle larger payments. Slow periods between projects automatically ease. Perfect alignment with construction cash flow.
Project Deposit Alignment
Payments follow project deposits. Big payment month handles more. Gap between projects handles less.
Seasonal Protection
Winter deposits down 50%? Payments down 50%. Built-in slow season relief.
Fast Access
Most applications receive decisions within 24-72 hours. Funding same or next day.
Growth Alignment
Business growing? Higher deposits mean faster repayment you can afford.
Weather Adjustment
Rain delays or weather impacts deposits? Payments adjust automatically.
Credit Flexibility
Deposit patterns matter more than credit scores. Strong revenue offsets challenges.
Revenue-Based for Construction
Situations where deposit-based payments work best for contractors.
Equipment Purchase
Finance equipment with payments that track your project deposits.
Typical funding: $25K-$100K
Seasonal Preparation
Fund busy season preparation. Heavy payments during peak when affordable.
Typical funding: $30K-$100K
Project Working Capital
Capital for project startup with payments that track project proceeds.
Typical funding: $25K-$75K
Fleet Expansion
Add equipment capacity with revenue-aligned payments.
Typical funding: $40K-$150K
Marketing/Growth
Fund growth initiatives. Pay for them through the revenue they generate.
Typical funding: $15K-$50K
Crew Expansion
Working capital to support additional crew and project capacity.
Typical funding: $25K-$100K
Revenue-Based vs. Fixed Payment Options
Understanding why revenue-based works for construction.
| Feature | Revenue-Based | Fixed Term Loan | Bank Loan |
|---|---|---|---|
| Payment Structure | % of deposits | Fixed monthly | Fixed monthly |
| Project Adjustment | Automatic | None | None |
| Seasonal Adjustment | Automatic | None | None |
| Speed | 24-72 hours | 1-4 weeks | 30-60 days |
| Credit Focus | Deposits | Mixed | Credit score |
| Best For | Variable revenue | Stable revenue | Strong credit/time |
Revenue-Based Requirements
Qualification focuses on deposit patterns and operational stability.
Business Deposits
Consistent deposits from project payments and client revenue.
$20,000+ monthly deposits
Business History
Established construction business with proven operations.
1+ years preferred
Deposit Patterns
Regular deposits showing operational consistency.
Consistent patterns
Business Bank Account
Business checking showing deposit history.
4+ months statements
No Active Bankruptcy
Cannot be in active bankruptcy. Past discharged bankruptcy may be acceptable.
No open BK
Active Operations
Currently operating with active or upcoming projects.
Active construction
Revenue-based financing emphasizes deposit patterns over credit scores. Strong project revenue supports approval.
Real Results
Northern Excavation
Site Work Contractor, Minnesota
The Challenge
Northern's extreme seasonality meant $120,000 monthly deposits in summer but $25,000 in winter. Fixed loan payments of $6,000 were manageable in summer but crushing in winter months.
The Solution
Revenue-based financing for $75,000 at 8% of deposits. Summer payments averaged $9,600. Winter payments dropped to $2,000 automatically.
The Result
Financing repaid primarily during summer season. Winter cash flow pressure eliminated. Northern has used revenue-based financing for equipment and working capital multiple times.
“Our summer does 5x our winter. Revenue-based financing means we pay 5x more in summer when we can afford it. Winter payments drop to almost nothing.”
Construction Revenue Data
Statistics illustrating construction revenue patterns.
Why Contractors Choose Revenue-Based
Advantages of deposit-based financing for construction.
Project Automatic
No need to request payment adjustments. Structure handles project variation automatically.
Slow Period Relief
Gap between projects means lower payments. Built-in protection.
Peak Acceleration
Strong summer months accelerate repayment when you can afford it.
Weather Adjustment
Rain delay weeks automatically reduce payments. Revenue alignment provides protection.
Margin Protection
Payments proportional to revenue protect construction margins.
Growth Support
As revenue grows, payments track proportionally. Growth funds itself.