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How AL Elite works for working capital for contractors
- Tell us about it. Your trade, where you operate, roughly how many jobs a month you quote, and whether you need capital, a customer-financing program or both. No credit pull.
- We match you. Your request goes to lenders in our network who work with contractors in your trade and state. For customer financing, we set up a program; for capital, we match you with business lenders.
- You choose and apply with the lender. Rates, terms and the decision come from the lender. For customer-financing programs, there's no cost to join and no obligation to use it on every job.
The $80,000 problem
A contractor signs $80,000 of work. The first draw is 30 days out, materials are due now and the crew is paid Friday. The gap is maybe $25,000 to $35,000 for a month or two. That's a working capital request, and lenders size it from your bank statements, backlog and the payment terms on the signed contracts. Bring those three things and the conversation is short.
Factor rates vs APR: read this before you sign
Some short-term business lenders quote a factor rate (for example 1.2) instead of an APR. A 1.2 factor on $30,000 means you repay $36,000. Over 12 months that looks like 20%; over 4 months the APR equivalent is far higher. Always ask for the APR equivalent and the total payback, and compare on that basis. Lenders in our network must provide it.
Subcontractor financing
Subs have the same problem one layer down, with a GC who pays when the owner pays. Options include working capital against the signed subcontract, a line of credit for recurring gaps, or factoring the invoice to the GC. Factoring is often the best fit for subs because the GC's credit, not yours, drives approval.
Example payments on working capital for contractors
Illustrative arithmetic only. Business lenders quote their own rates, fees and structures (some use factor rates rather than APR; ask for the APR equivalent).
| Amount | Example APR | 6 mo | 12 mo | 18 mo | 24 mo |
|---|---|---|---|---|---|
| $15,000 | 8.50% | $2,562.34 | $1,308.30 | $890.53 | $681.84 |
| 12.50% | $2,591.93 | $1,336.24 | $918.22 | $709.61 | |
| 18.50% | $2,636.62 | $1,378.77 | $960.67 | $752.49 | |
| $30,000 | 8.50% | $5,124.69 | $2,616.59 | $1,781.06 | $1,363.67 |
| 12.50% | $5,183.87 | $2,672.49 | $1,836.44 | $1,419.22 | |
| 18.50% | $5,273.23 | $2,757.54 | $1,921.33 | $1,504.98 | |
| $60,000 | 8.50% | $10,249.37 | $5,233.19 | $3,562.12 | $2,727.34 |
| 12.50% | $10,367.73 | $5,344.97 | $3,672.87 | $2,838.44 | |
| 18.50% | $10,546.46 | $5,515.09 | $3,842.66 | $3,009.96 |
Example monthly payments using standard amortization with no fees. The APRs shown are illustrative tiers, not offers. Your rate, fees and term are set by the lender and depend on your credit profile, income and state.
What lenders look for
Every lender sets its own criteria. The things that come up most often:
- Time in business. Many business lenders want at least one to two years of operating history; some products accept less.
- Revenue. Annual revenue thresholds vary by lender and product. Bank statements are the usual proof.
- Business and personal credit. Smaller contractors are often underwritten partly on the owner's personal credit.
- Licensing and insurance. A current contractor's license (where required) and general liability insurance.
- State. Lender availability and product rules vary by state. We match you with lenders who serve your location.
- Signed contracts and backlog. The clearest evidence the loan will be repaid from real work.
Frequently asked questions
How is working capital for contractors calculated?
Lenders look at monthly revenue from bank statements, signed backlog and the payment terms on current contracts, then size a loan or line to the gap you can show. A clear statement like 'I need $30,000 for 60 days until the first draw on a signed $80,000 job' is exactly what they want to hear.
What's the difference between a working capital loan and a line of credit?
A loan is a lump sum repaid on a schedule; a line is a limit you draw against and repay as needed, paying interest only on what's outstanding. Lines suit recurring seasonal gaps; loans suit a one-off need.
Can a subcontractor get working capital?
Yes. Subcontractors use working capital loans, lines of credit and invoice factoring. Factoring is often easiest because approval rests on the GC's credit.
Is AL Elite a lender for working capital for contractors?
No. AL Elite is a matching service. We route your request to business lenders in our network who fund working capital for contractors, and they set the terms and make the decision. Lenders pay us for introductions; you don't.
Does requesting options affect my business or personal credit?
Submitting a request to AL Elite does not pull credit. Business lenders typically run a soft inquiry to pre-qualify and a hard inquiry at formal application. We tell you each lender's approach before you proceed.