Business loans for construction and trades: a practical guide

The trades cash flow reality

A plumbing contractor wins a $180,000 commercial fit-out. Materials cost $45,000 upfront. Wages for the crew over 8 weeks are $62,000. The invoice isn't due until 30 days after practical completion. By the time the client pays, the contractor has been out of pocket for up to 14 weeks.

This is not mismanagement. It is the structural reality of project-based trades work.

Why banks are particularly bad for trades businesses

• →Industry classification — banks rate construction as elevated risk due to historical insolvency rates
• →Lumpy revenue — bank credit models prefer consistent monthly deposits
• →Security requirements — banks typically want property. Many trades owners won't (rightly) pledge their home
• →Time — bank approvals take weeks. Your supplier requires payment now

What non-bank lenders do differently

Non-bank lenders who work with trades understand project-based businesses. They assess annual or rolling 6-month revenue, outstanding contracts as context, bank statement cash flow over formal financials, and business history and track record of project delivery. Decisions are fast — often within hours.

What you can use a trades business loan for

• →Materials and stock — front-loading costs before a project starts
• →Equipment purchase or upgrade — replacing key tools, machinery, or vehicles
• →Payroll bridging — meeting wage obligations when project payment timing creates a gap
• →Quote-to-start bridging — the 4–8 week gap between winning a tender and first progress payment
• →Subbies and labour costs — paying subcontractors before the head contractor pays you
• →Vehicle and equipment finance — utes, trailers, plant financed against the asset

Invoice finance for trades

If your business has significant outstanding invoices, invoice finance allows you to access that capital immediately rather than waiting for payment. You submit unpaid invoices to the finance provider, who advances 70–90% of the face value within 24–48 hours. When the client pays, the remainder (less fees) is forwarded to you.

Equipment finance specifics

• →The equipment itself is the security — no property required
• →Available for new and used equipment
• →Terms typically 12–60 months
• →Structured as chattel mortgage, finance lease, or hire purchase
• →May be immediately deductible under the instant asset write-off (verify with your accountant)

What you'll need to apply

For a non-bank working capital loan: ABN registered for 12+ months, last 6 months of business bank statements, monthly revenue of $10,000+, and basic business information. For equipment finance: a quote for the equipment, basic business info, and bank statements (3 months often sufficient).

General information only. Not financial advice. Subject to individual lender assessment and eligibility. Seek advice from your accountant regarding equipment finance structures and tax implications.