6 Essential Steps After Getting Your Business Loan
May 6, 2025
Unsecured vs Secured Business Line of Credit
July 7, 2025
You finish a job. Materials are paid for, labor hours are tallied, the work’s done right, but the invoice hasn’t cleared. Meanwhile, the next project can’t wait. You need to order supplies, book subs, and maybe even put down a deposit for new equipment.
When cash flow doesn’t match project flow, a lot of construction business owners feel stuck. That’s where a construction line of credit comes in. It can help you bridge the gap between payment delays and project demands. If you’ve ever felt boxed in by waiting, this guide will show you a way out.
What Is a Construction Line of Credit?
Think of a construction line of credit like a revolving account made just for your business. Instead of getting one lump sum like a typical loan, you get approved for a credit limit and draw only what you need. When you pay it back, that amount becomes available again. You’re only charged interest on what you use, not the full credit line.
It’s similar to how a credit card works, but it’s tailored for larger business needs. You can use it to buy materials, cover payroll, rent equipment, or even handle emergency costs mid-project.
This kind of financing gives you flexibility. You don’t have to wait for one job to finish and pay out before starting the next. You can take on more work, make smarter purchases, and avoid cash crunches. Some companies use their line regularly like a tool; others keep it as a backup.
There are also two main types of credit lines you’ll want to understand: secured and unsecured.
Secured vs. Unsecured Lines of Credit
A secured construction line of credit is backed by collateral. That might be equipment, real estate, or another valuable asset. Since there’s less risk for the lender, you’ll usually get better rates and higher credit limits. These are great if you’ve got the assets and want more favorable terms.
An unsecured line doesn’t require collateral. It’s usually easier to get and faster to access, but it comes with higher interest rates and lower credit limits. It’s ideal for businesses with strong revenue or good credit that want fast funding without tying up assets.
Benefits of a Line of Credit for Construction Businesses
If you’ve run a construction company before, you know that timing is critical. However, project timelines rarely line up with payment timelines. That’s where a credit line becomes one of your most useful tools.
Here’s how it can help:
- Cover payroll when one job overlaps with another, or when you need extra help but haven’t been paid yet.
- Buy materials upfront without putting pressure on your day-to-day budget.
- Replace or repair equipment fast so you don’t fall behind schedule.
- Start new projects while old ones are still waiting for final checks to clear.
- Manage emergencies like damaged inventory, unexpected subcontractor costs, or even bad weather delays.
Instead of applying for a new loan every time you need help, a line of credit gives you constant access to funds. You can draw what you need and pay it back on your own schedule. There’s less paperwork, fewer delays, and no need to explain your situation over and over again.
That kind of flexibility is powerful. You don’t have to say no to new business or pause progress just because cash is tight. You don’t have to run leaner than you want to or put pressure on crews to wrap jobs faster than they should. A line of credit gives you room to run your business the way you actually want to.
When and How to Use a Construction Line of Credit
There’s no single “right time” to use a credit line, but there are a lot of good ones. Most construction businesses use theirs for three key purposes: covering cash flow gaps, preparing for growth, and handling the unexpected.
Here are some common examples:
- Slow season bridge: Use it during the off-season when projects are fewer, but payroll and expenses continue.
- Mobilization costs: Draw on the line to prep and staff large projects before the first payment comes in.
- New bids and expansions: Want to take on more work or go after bigger jobs? A credit line can give you the confidence and capital to do it.
- Change orders or material cost spikes: When project specs shift or suppliers raise prices, you’ll have a buffer.
- Subcontractor delays: Pay out what’s needed to stay on schedule, even if another crew drops the ball.
This isn’t about borrowing recklessly. This is a pathway to keeping your business stable, strong, and ready.
What You Need to Qualify for a Construction Line of Credit
Getting approved for a line of credit isn’t as complicated as many business owners think. Still, it helps to know what lenders typically look for. Most companies will ask for:
- At least 12 months in business
- Minimum $500,000 in annual revenue
- A personal credit score of around 600 or higher
These are general benchmarks, not hard lines. Unlike traditional banks, some small business lending companies look at the full picture, not just your credit score or how long you’ve been operating. If you’re growing, reliable, and committed to your work, that’s something that will be taken into consideration.
Business Loans vs. Lines of Credit: What’s the Difference?
If you’re deciding between a traditional business loan and a line of credit, it helps to understand how they differ. Here’s a simple breakdown:
| Feature | Line of Credit | Business Loan |
| Access | Ongoing, reusable funds | One-time lump sum |
| Speed | Often funded in 24 hours | Typically 1–3 weeks |
| Flexibility | Draw what you need, when | Fixed repayment schedule |
| Best for | Cash flow gaps, growth | Large, one-time expenses |
If your business experiences regular fluctuations in cash flow or you need the flexibility to act quickly, a line of credit may be a more suitable option.
Why Many Builders Turn to King Capital
Plenty of lenders claim to understand construction, but few back that up with their own capital. King Capital is a rare example. Instead of simply underwriting deals, they frequently co-invest, putting their own funds alongside their clients. That level of “skin in the game” reflects true confidence and alignment.
So, what makes them different?
- Transparent terms: No surprise fees or fine print gotchas.
- Speed when it counts: Same-day funding is available on many products.
- Real-time support: After-hours assistance for businesses that don’t stop at 5 p.m.
- Advisory mindset: Relationship-driven advisors guide clients long-term, instead of short-term sales reps.
By combining speed, clarity, and a people-first approach, King Capital is one lender that truly puts business owners first.
How to Apply
Applying for a construction line of credit through King Capital is simple and fast. You can complete the application online in only a few minutes. No lengthy paperwork or endless phone calls required.
Want to speak to someone? You’ll talk to a real person who understands small business finance. Don’t want to? That’s fine too! Our digital process is built for speed and privacy.
You can expect quotes within a day, and you won’t be ghosted after funding. We stay in touch and support your goals long after the initial deal is closed.
Check Your Eligibility Today with King Capital
If you’re growing, juggling clients, or tired of waiting on payments, a construction line of credit might be the lifeline your business needs. It gives you breathing room when cash is tight and confidence when opportunity knocks.
Whether you want to explore options, ask a question, or just see what’s possible, we’re here to help.
Check your eligibility with no credit impact, or reach out for a quick consultation. With King Capital, you don’t just get funding. You get a partner.
