With more than 650,000 construction firms in the U.S. building more than $1 trillion of buildings each year, it’s never been a better time to be in the construction industry. If you’re interested in expanding a construction company that you currently own, acquiring an existing construction business, or even buying out a partner in your construction firm, an SBA loan like the SBA 7(a) loan may be able to help.
SBA 7(a) Loans for Builders and Construction Firms
Construction companies can use SBA 7(a) loans for purposes including:
Buying construction equipment: SBA 7(a) loans can be used for equipment purchase with terms of up to 10 years.
Buying out a business partner: If one or more of the partners in your construction business wants to move or retire, and you want to buy them out, an SBA 7(a) loan could provide the financing you need.
Building a new office or headquarters: While it’s more common for construction companies to be building structures for their clients instead of themselves, many larger firms will eventually need a place of their own to call home. Fortunately, the 7(a) loan program can be used for owner-occupied commercial real estate financing, with loan terms of up to 25 years.
Consolidating eligible business debt: Refinancing your construction company’s debt could free up a lot of cash flow for your business— and a 7(a) loan could be a good way to do it. Despite that, not all debt can be refinanced under the SBA 7(a) program— only debt that was originally used to purchase goods that would eligible for 7(a) financing in the first place.
Acquiring a competitor: If you’d like to purchase another construction company to acquire their clients, reduce local competition (or both), than you may also be able to do so with an SBA 7(a) loan.