Contractor Financing Products: Equipment Loans, Lines of Credit & More 2026

Scan the list below, pick the product that matches what you need money for right now, and go straight to that guide — each one covers rates, approval requirements, and the application steps for that specific product.

What to know

Contractor financing isn't one product. The five categories below solve different cash problems at different costs, speeds, and credit thresholds. Choosing the wrong one — say, a term equipment loan when you need a 60-day payroll bridge — adds unnecessary cost and delays. Here's how they compare at a glance:

Product	Typical APR (2026)	Funding Speed	Best For
Equipment loan (bank/CU)	7–10%	7–15 days	Named equipment purchase, 680+ FICO
Equipment loan (specialty/online)	9–18%	1–5 days	Same, 600–640+ FICO
SBA 7(a) loan	8–11%	30–45 days	Large purchases, long terms, 640+ FICO
Business line of credit	10–15%	1–10 days	Rolling working capital, payroll gaps
Invoice factoring	1–5% per 30 days	1–5 days	Outstanding receivables, no debt added
Bridge / working capital loan	Varies	1–7 days	Gap between project payment cycles

Equipment loans are the most common product contractors finance. The collateral is the equipment itself, which keeps rates lower than unsecured debt. Bank and credit union lenders price at 7–10% APR and want 680+ FICO, 20–25% down, and two years in business. Specialty and online lenders open up to 600–640 FICO, fund in 1–5 business days, and often waive the down payment — but you'll pay 9–18% APR for that flexibility. The 2026 contractor equipment approval study found approval rates and terms vary significantly by lender type and credit tier, so shopping at least two or three sources matters. One bright spot for 2026: the Section 179 deduction limit is $1,220,000, meaning a financed equipment purchase can produce a full first-year deduction even if you only put 20–25% down.

Lines of credit are the right tool when your cash need is recurring and unpredictable — covering payroll during a slow draw period, buying materials before a job starts, or floating subcontractor invoices. Rates for qualified borrowers (640+ FICO, $250,000+ annual revenue) run 10–15% APR, and you only pay interest on what you draw. The best business lines of credit comparison for contractors breaks down how bank options like Bank of America compare to faster, looser-credit alternatives — worth reading before you apply. The catch: lenders typically review 12 months of bank statements, want to see monthly debt service stay under 25% of gross monthly revenue, and may restrict draws if that threshold is breached.

Invoice factoring doesn't add debt — it converts what you're already owed into cash. Factoring companies advance 80–90% of the invoice face value, then collect from your GC or client directly and remit the remainder minus a fee of 1–5% per 30-day period. That fee structure looks cheap until a slow-paying client drags a net-60 invoice to net-90, doubling your effective cost. Factoring works best for contractors with creditworthy clients but chronic slow-pay cycles.

Bridge loans and working capital loans cover the gap between when a project costs money and when the owner pays. These are short-term, higher-cost instruments. According to the 2026 contractor funding speed study, the tradeoff is clear: faster funding correlates with higher rates, so bridge financing makes financial sense only when the alternative is missing payroll or stopping work.

SBA 7(a) loans offer the lowest rates and longest terms for contractors who qualify — up to $5,000,000, 8–11% APR, and 10-year terms on equipment. The requirements are meaningful: 640+ FICO, 24 months in business, a debt-service coverage ratio of at least 1.25x, and 30–45 days to close. If you're early-stage or have had recent credit problems, the 2026 contractor denial rate study outlines where most SBA-track applications fall apart and what to fix first. The SBA guarantees up to 85% of the loan amount, which is why its rates beat the open market — but that guarantee comes with documentation requirements that can trip up contractors who commingle personal and business finances.

For contractors buying into a bonded project, pairing your financing strategy with the right surety coverage matters too — bond financing requirements for contractors outline how performance and bid bonds interact with project financing, which affects how lenders view your overall debt load.