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Building a Strong Business: Loans for Home Subcontractors

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Updated August 21, 2022

Home subcontractors can sometimes face challenges when working to grow a successful business. As a subcontractor, your business schedule, funding for materials, and ultimately your paycheck are often in the hands of the contractor overseeing a project. It is not uncommon to complete a job and still be left waiting to receive your money. You need working capital to cover your business expenses during those lags between a job well done and being paid-in-full.

But, finding small business funding quickly and with the right terms for your needs is not always easy. Often, you don’t have 30 to 90 days to wait for approval for the capital required to move forward with your business. You need solutions that are fast and that meet your unique business needs. That’s why finding the perfect small business loan online is essential for success!

Financing for Subcontractors include:

  • Making payroll for your employees. This affects your business, because you cannot retain good qualified help if you are not able to pay them on time.
  • Paying for the materials required to complete the job. You may have a deposit from the project manager or building contractor, but you won’t be paid again until mid-point or at the conclusion of the project. Suppliers need to be paid and you need working capital today to do so.
  • Daily operation expenses add up. From equipment and supplies to office expenses, you need to keep your business running smoothly.

The bottom line is, you need to find a subcontractor financing solution that can provide funding quickly and effectively. You don’t have time for long applications and jumping though the hoops of strict credit criteria. There are a few options to choose from and each has its benefits and challenges:

Bank Subcontractor Loans

Small businesses like yours, with less than 20 employees, will probably struggle to get approval for a loan from a bank. The underwriters simply require what small business typically lack: a detailed business plan, excellent credit, lengthy business history and valuable collateral.


  • Your interest rate, should you qualify, will be lower than many other loan sources.


  • The application process is lengthy, time consuming, and requires a lot of financial documentation.
  • Funding is not quick. It may take 30-60 days to receive the money you need.
  • It is risky for your personal property. Bank lenders often require personal guarantees from the small business owners.
  • If you are a relatively new business, you should know that banks turn away requests for start-up loans because three years of business financial data as backing is a requirement for approval.

Subcontractor SBA Loans

The SBA is a government agency that does not directly lend money, rather it connects borrowers to a partner lender and then guarantees part of the loan. According to, each government program has its own set of criteria for what types of businesses can qualify for the program. They have several loan options to choose from that may assist your home subcontracting business. For example, their microloan program will lend up to $50,000 to fund start-up costs, assist with cash flow, purchasing supplies and support overall growth for your business.

With this option, the SBA provides funds to one of their lenders, which would be a nonprofit community-based organization with experience in lending and management assistance. The organization would then offer the microloan program to an applicant that met their criteria. But meeting the criteria, and proving you do, can be a task.


  • The interest rate, if you qualify will be relatively low.
  • The loan qualifications may be slightly easier to meet than at the bank.


  • They will judge you on your credit score.
  • You will be required to have a very detailed business plan, well-articulated, and include your marketing plans for the future.
  • Your money will take about 90 days to receive. The government is involved and the application process and approval can a long time.
  • An SBA microloan cannot be used to pay existing debts.

Seeking Alternative Lenders

Your business requires you to keep a busy schedule and allows little time for long applications, never mind waiting more than a month for the funding you require.

According to, most small businesses today turn to alternative lending solutions to get the funding they need quickly and easily. Alternative lenders offer specialized loan solutions to fit the needs of business owners who want to avoid the hassle of the bank and the SBA application process. These customized options include small business loans and lines of credit, with more flexibility and ease than with conventional lenders.


  • The application process to secure your loan is usually simple, straightforward and easy to complete.
  • The health of your business and your potential is considered in the approval process.
  • You can be approved even when your credit score is less than perfect.
  • Approval and getting the cash you need is fast and easy.


  • Your interest rate may be slightly higher than with a bank or the SBA, but you stand a greater chance of approval and fast access to funding.

How to Choose an Subcontractor Loan

Finding the right loans for home subcontractors is not that difficult, but you should give careful consideration to your personal and business needs. Sometimes you need fast, easy solutions to fund your business, and you need solutions that will not require a good credit score or lots of paperwork. Alternative options are ideal for small businesses. To learn more about business funding solutions, contact Credibly today!