Business Line of Credit for Construction Companies in Florida
In Florida construction, the work rarely pays on the same schedule as the bills. Draws come monthly, retainage comes at closeout, and storm recovery or a large new contract can double your costs almost overnight. A business line of credit gives a contractor a standing pool of cash to draw from as jobs start and repay as they pay, which is often cheaper and more flexible than taking a new loan for every gap.
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How construction companies in Florida use business line of credit
- Covering payroll between monthly pay applications
- Buying materials before prices rise or to secure delivery dates
- Mobilizing quickly for storm repair and recovery work
- Handling change orders before they are approved and paid
- Keeping a cash reserve for slow months or delayed projects
How a line of credit fits the construction cash cycle
A line of credit gives you a maximum limit you can draw against at any time. When a project starts, you draw to cover materials and labor. When the draw or invoice is paid, you pay down the line, and the limit is available again. You generally pay only for what you use.
This makes a line of credit a natural fit for contractors who have a steady stream of projects with predictable, if delayed, payments. It is less suited to covering long-term investments such as equipment or real estate, which are better matched with term financing.
Bank lines vs. online lines
Banks usually offer the lowest-cost lines but require more: two or more years in business, tax returns, financial statements, good credit and sometimes collateral or a borrowing base tied to your receivables. Review can take weeks.
Online and alternative lenders often decide faster with less paperwork, mainly based on bank statements and credit. Their lines may cost more, have smaller limits and require each draw to be repaid over a shorter period, sometimes with weekly payments. Some contractors start with an online line and move to a bank line as they grow.
What Florida lenders want to see
Because a line of credit is ongoing, lenders focus on consistency.
- Usually one or more years in business, often two for bank lines
- Monthly revenue large enough to support the limit, commonly $15,000+
- Fair-to-good owner credit
- Bank statements, and tax returns or financials for larger lines
- Active Florida contractor license and insurance
- Accounts receivable aging and backlog for receivables-based lines
Storm work and seasonality
Hurricane recovery can bring a surge of work and an equally sudden surge of costs. A line of credit set up in advance, while business is steady, is much easier to obtain than one requested in the middle of a crisis. If your work is seasonal or storm-driven, consider applying during a stable period so the line is ready when you need it.
Keep in mind that lenders may review or reduce lines if revenue drops significantly, so do not treat the limit as guaranteed forever.
Good habits that keep a line healthy
Tie draws to specific jobs and repay as those jobs pay. Avoid keeping the line fully drawn for long periods, which can signal stress to the lender and leaves you no room for surprises. Track draw dates and repayment dates alongside your project schedule. If you find yourself drawing to make payments on other debt, pause and look at the underlying profitability of your jobs.
Comparing offers under Florida's disclosure law
Florida requires many non-bank commercial financing providers to disclose the total cost, payment amounts and prepayment terms for many transactions of $500,000 or less, and it bars commercial loan brokers from charging advance fees. When comparing lines, look at draw fees, maintenance or annual fees, the repayment period for each draw, payment frequency, renewal terms and any prepayment costs.
Line of credit or invoice financing?
Both help with the gap between doing work and getting paid. A line of credit is based on your overall business and can be used for anything. Invoice or receivables financing is tied to specific approved invoices or pay applications, so the amount available grows with your billing. Subcontractors with strong GC customers but limited credit history sometimes find receivables financing easier to obtain. Many contractors eventually use a line of credit for general needs and equipment financing for machines, keeping each type of debt matched to its purpose.
What lenders typically look at
| Time in business | Often 1+ year |
|---|---|
| Monthly revenue | Commonly $15k+/month |
| Credit | Usually fair-to-good personal credit |
| Typical documents | Bank statements; sometimes tax returns |
| Typical speed | Days to a few weeks |
These are general industry ranges, not offers or guarantees. Actual requirements vary by lender and product.
Business Line of Credit in Florida: things to know
Florida is one of the states with a commercial financing disclosure law, so for many offers the provider must give you a standardized disclosure of the total cost, payment terms and (for some products) an estimated APR before you sign. Read it and compare offers side by side. Business Line of Credit terms, eligibility and availability vary by lender.
Frequently asked questions
What size line of credit can a contractor get?
Limits usually depend on monthly revenue, credit, time in business and sometimes receivables. Many lenders start with a modest limit and increase it after a period of on-time payments.
Can a line of credit cover retainage gaps?
It can help, but retainage can be outstanding for months. Make sure the repayment terms on each draw give you enough time, or consider receivables financing designed for construction.
Is a line of credit secured?
Bank lines often are, by receivables or business assets. Many online lines are unsecured but require a personal guarantee from the owners.
Can I get a line of credit as a newer contractor?
It is harder, since most programs want at least a year of history. Equipment financing or receivables financing may be easier first steps.
Is there a fee to check options?
No. Chief of Money does not charge applicants, and submitting the form does not pull your credit.