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Running a construction company means constant cash flow pressure, from material costs to delayed client payments. That’s why many firms in 2025 are turning to Merchant Cash Advances (MCAs) for quick working capital.
This guide explains how MCA funding works for construction businesses, when to use it, and how to pick the right provider.
Simply put, a Merchant Cash Advance (MCA) is a lump-sum advance on your future receivables.
You get instant working capital, and the lender collects a small percentage of your future payments daily or weekly, until the balance (plus a fee) is repaid.
Unlike traditional loans, MCAs:
This makes MCAs a perfect fit for construction firms juggling invoices, retainers, and staggered payments.
Let’s face it, construction projects don’t always go to plan. Cash gaps are common, and waiting for banks isn’t an option.
Stat 1: According to the 2025 Small Business Lending Report (NFIB), 47% of construction firms faced delays in receiving client payments exceeding 30 days.
Stat 2: MCA usage among small construction businesses grew by 19% year-over-year in 2025, mainly due to supply-chain disruptions and rising material costs.
Stat 3: Over 63% of funded companies in Q3 2025 used advances for equipment repair or payroll bridging.
Here’s the step-by-step process 👇
Example (2025):
A California-based commercial roofing company needed $85,000 to buy materials for a government project. Traditional bank turnaround? 21 days.
Lending Valley processed their MCA and funded them in under 18 hours.
The project launched on schedule, and the company repaid early, earning a renewal discount.
MCAs shine in short-term, time-sensitive scenarios, not as long-term financing.
Use them when you need:
In April 2025, a Miami-based contractor used an MCA for $120K to buy materials ahead of a city housing project. The advance was funded in 36 hours and was repaid over 5 months. Without it, the company would have lost the bid.
A Chicago remodeling company faced a $45K payroll crunch after client delays. Through Lending Valley, they got same-day approval and cleared payroll without penalties — sustaining staff and workflow.
In July 2025, a roofing company used a $90K MCA to secure early-bird material discounts before prices rose 12%. They repaid in 6 months, saving $11K in supply costs and keeping margins healthy.
| Pros | Cons |
|---|---|
| ✅ Quick approval (within 24–48 hours) | ❌ Higher overall cost than loans |
| ✅ No collateral needed | ❌ Frequent (daily/weekly) payments |
| ✅ Approval based on revenue, not credit | ❌ Not ideal for long-term financing |
| ✅ Flexible repayment schedule | ❌ Some providers charge hidden fees if not vetted |
Before signing, vet your funding partner carefully. Here’s your quick checklist:
Tip: Reputable lenders like Lending Valley offer 24-hour funding, personalized repayment terms, and full transparency on costs.
Construction remains one of the fastest-growing small-business sectors in 2025, but also one of the most cash-strained.
This gap shows why more firms rely on alternative funding models like MCAs for agility.
Here are the most common funding challenges faced by construction companies — drawn from 2025 data trends and real industry patterns:
Construction businesses often wait 30–90 days for client invoices to clear.
That gap between project completion and payment creates cash-flow strain, especially when payroll and supplier bills can’t wait.
2025 Insight:
A Construction Financial Index survey (Q2 2025) reported 46% of mid-size contractors experienced “chronic late payments” impacting at least one project per quarter.
Projects require buying materials, hiring subcontractors, and securing permits long before receiving revenue.
Banks hesitate to finance those “unsecured” costs.
Example:
A Florida contractor in 2025 spent $90,000 upfront on steel and lumber for a municipal project, only to face a two-month city payment delay, forcing reliance on an MCA for bridge capital.
Banks often label construction as high risk due to:
As a result, approval rates for SBA or commercial loans are 15–20% lower for construction firms than service or retail businesses.
Material price volatility has worsened post-2023.
When prices rise 10–15% mid-project, contractors must cover the difference until reimbursements arrive.
Stat (2025):
The U.S. Bureau of Labor reported construction input costs up 8.3% YoY as of September 2025, particularly in steel, copper, and concrete.
Clients or government contracts often withhold 5–10% of payment until final inspection.
That money might stay locked for months, limiting cash for ongoing projects.
Case Study:
A Texas road contractor completed a $600K project in March 2025 but waited until July for a 10% retainage release, delaying new bids and stretching their cash reserves thin.
Even approved funding isn’t fast enough.
SBA and commercial loans can take 2–6 weeks for underwriting and document review, which simply doesn’t match project urgency.
That’s why fast-access options like Merchant Cash Advances (MCAs) are gaining traction in the industry.
Winter or off-season months mean reduced income but ongoing expenses.
Cash flow planning gets tricky when your project pipeline dips sharply for part of the year.
Tip:
Construction businesses often combine MCAs for short-term gaps and SBA loans for long-term growth, balancing speed and stability.
| Challenge | Why It Matters | Best Solution |
|---|---|---|
| Delayed payments | Cash flow gaps hurt daily ops | MCA or invoice financing |
| Upfront costs | Material & labor before payment | Short-term funding |
| Tight credit | Banks consider construction risky | Alternative lenders |
| Material price hikes | Inflation & supply chain | Bridge funding or credit lines |
| Retainage delays | 5–10% withheld until project end | Working capital advance |
| Slow approvals | Loans take weeks | MCA for 24–48 hr funding |
| Seasonal dips | Revenue inconsistency | Mix of MCA + SBA 7(a) loan |
An MCA for construction companies can be a smart way to keep projects running smoothly when timing is everything.
Use it strategically, for short-term cash gaps, material buys, or emergencies, and work only with a trustworthy, transparent funding partner who aligns with your growth goals.
When done right, MCA funding can literally keep your business building forward, one project at a time.
