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How to Start a General Contracting Business

Alternative Small Business Funding

If you have a desire to start a general contracting business, you’re in good company. As the industry continues to grow, there’s room for new services to take a portion of the market. However, you need to be ready to compete with companies that have been in business for many years and have a strong reputation in the industry. 

In the current environment, you’ll be glad to know that consumers are willing to try new businesses…but only if you impress them and have the right foundations in place to offer a positive experience.

As you’ll see, this guide is split into two; the process of starting a general contractor business and financing the business. In the second section, we’ll talk about potential contractor loans, alternative lending, construction company loans, and other options you may have as a construction company business startup.

Starting Your General Contracting Business - Step-by-Step

Step 1 - Research and Plan

Before anything else, perform a quick search on Google. In all likelihood, you’ll see several companies that already offer the services that you plan to provide. When entering the market, these companies will be your competitors. If you don’t think that you can offer a better service, you might want to think again about starting a business.

Of course, this is a guide to help you start a business rather than scaring you away from the idea. If you’re confident in your ambitions, you’ll need to research the following:

  • Initial costs
  • Marketing expenses
  • Your services
  • Ongoing expenses
  • Target market
  • Pricing strategies
  • Potential profit
  • Obstacles

Step 2 - Registration and Formation

After performing research and drawing up a business plan, we then recommend moving onto the formation and registration phase. What does this mean? You’ll need to form your business choosing one of the common business entities - this includes LLC (limited liability company), sole trader, partnership, or corporation.

Once your company is formed, you’ll then need to register for federal and state taxes (sorry!). Although people often talk negatively about the EIN process, there are numerous guides online that will help.

Step 3 - Acquire Licenses, Permits, and Insurance Policies

Next, you’ll need to think about licenses and permits to operate within your chosen location. For instance, you’ll need a Florida contractor license which requires proof of workers’ compensation insurance and proof of liability. If you need help with licenses, permits, and insurance policies, remember that lots of professionals make their services available for a construction contractor business startup.

As an example, you could enlist the help of attorneys, accountants, recruiters, other business owners, and even a mentor.

Step 4 - Launch Your Business

At this stage, you’re ready to launch your business and put everything in your business plan to good use. For example, this includes starting a website, claiming your Google My Business profile, creating business cards and leaflets, engaging with prospective clients, attending trade shows, and more.

Of course, you may have noticed that we haven’t addressed one of the most important areas of all - financing. How will you finance the new general contractor business? Well, the good news is that the South Florida Funding Group can help both in the advice in the next section of this guide and with our advanced services.

Financing Considerations

Before offering some of the best financial solutions for a new business, we first want to discuss the considerations that you need to keep in mind when planning. Often, these considerations will determine your access to contractor loans and alternative lending methods.

Credit History

The better your credit history, the more options you will have when it comes to funding. Why? Because a strong credit history tells lenders that you’re reliable and will pay back whatever you borrow. When you have a poor credit history, lenders have less security.

Before getting involved with financial institutions and solutions, get your free credit report to assess your history.


If you don’t have a strong credit history, you may be able to secure a loan with assets. For example, a secured business loan uses assets as collateral rather than creditworthiness.


While this doesn’t apply to new businesses, existing businesses need to consider their profitability when pushing for a loan. Once again, this proves to lenders that you will have the resources to repay the loan in the future.

Your Approach

Finally, we can’t tell you how many people have failed to get their business past the initial stage because of their approach to financing. Sadly, some new business owners decide to hide things and avoid being transparent with prospective lenders. In our experience, this only ends poorly.

One good way to take the right approach is to address potential challenges in your business plan; lenders want to see that you’ve considered potential obstacles and have a plan to overcome them. Also, contact the South Florida Funding Group to consider construction company loans and get the best form of finance for the future health of your venture.

Your Financing Options

In the following section, you’re going to see a wealth of financial options (excuse the pun). Some will require strong credit history, some will require experience in the field, and some will prove useful for new businesses with bad credit. Look through the options below, talk to the South Florida Funding Group, and choose the best option.

Construction Company Loans

Firstly, there’s no better place to start than with the most traditional option - a bank loan. Typically, banks are the preferred option because they offer the best rates and terms. However, there are potential traps and problems with this route. Primarily, banks have toughened their lending stance since the global financial crash in 2008. If you’re to borrow from a bank, you may need a good credit history.

Furthermore, the application process is typically lengthy, and you’ll need to wait weeks for approval. If this is an option, it’s worth exploring for the generous rates. Otherwise, continue with others on this list.

SBA Loans

Next, the Small Business Administration has helped many businesses over the years secure access to financing, and it could aid you next. By guaranteeing a large amount of the loan, lenders have security in case you were to miss payments.

Like banks, they offer advantageous terms and interest rates. Also, like banks, they have extensive application procedures. Ultimately, this means that you could wait weeks for approval (do you really want to wait this long?).

While the 7a Guaranteed Loan option makes up to $5 million available with favorable terms, the 504 Local Development Company Program is suited to those that want to spend the money specifically on equipment or real estate.

Peer-to-Peer Lending

In recent years, more new business owners have turned to so-called P2P lending. Essentially, this is where you borrow from a large group of people through a trusted platform rather than a single lender. If enough people contribute to your project and you reach the desired amount, you’ll receive the funds.

With thousands of people and businesses asking for loans on P2P lending platforms, you need to create a compelling story and convince people to jump on board with your project.

Equipment Financing

As a general contractor business, you’re likely to need lots of equipment to get started. Rather than choosing to purchase everything up front, you might decide to take advantage of equipment financing. Like financing a phone or car, the idea is that you take ownership of the equipment but spread the cost over many months (with interest on top). Throughout the agreement, the equipment itself is the collateral.

With the equipment as collateral, you don’t need to worry about your own assets or even creditworthiness in many cases. With the South Florida Funding Group, you can get a decision within just 24 hours.

Business Lines of Credit

While some people reading this will need funding for everything, others will just need a little assistance. Next, we have a suggestion for those in the latter group. Rather than a lump sum, this alternative lending method offers a pool of money to business owners. You’ll have a maximum credit amount that you can access at any time; you will only ever pay interest on what you take from the account.

Eagle-eyed readers will have spotted the similarities between this option and a personal credit card - essentially, a line of credit is a credit card for your business. Ultimately, the terms you get for contracts such as this depend on whether you go through a traditional or alternative lender.

When working with the South Florida Funding Group, we consider your business and attempt to get you the best terms possible. This source of finance is ideal as working capital - you’ll have funds for contingencies and to meet short-term expenses.

Merchant Cash Advance

Although this doesn’t technically fall into the category of contractor loans, a merchant cash advance (MCA) does provide the business with a lump sum. Essentially, the lender purchases a portion of your future sales.

As a contracting business, one of the biggest problems is payment; you’ll forever wait on people and businesses to settle their invoices. According to one study, the average waiting time for payment is up to 83 days in this industry.

If you’re ever waiting for clients to settle their invoices, this doesn’t stop your own suppliers from chasing payments. If there’s a blockage in the chain, you can borrow from a lender and repay when invoices finally come in.

If you choose the South Florida Funding Group, you’ll get approval within 48 hours and could receive funding within five days. Depending on your business, you could borrow between $5,000 and $500,000. In terms of repayment, this takes place over four to 18 months (the interest rate will also vary).

Friends and Family

Do you have friends or family that can help to get your construction contractor business startup off the ground? Once again, your ability to borrow from friends and family will depend heavily on the amount you need to borrow. Of course, it also depends on what money your loved ones have and whether they’re willing to allow you to borrow some.

If you are to use friends and family, the most important thing is to draw up an official contract. While this might seem unnecessary, it’s the best way to protect your relationship and ensure that everybody is on the same page.

Secured Business Loans

Finally, another option to explore includes secured business loans. If you have assets, you could borrow against them. Naturally, you’ll need to be careful if you choose this option because your asset will become collateral for the loan. As soon as you miss payments and get into trouble, the lender will have a claim to the asset.

The South Florida Funding Group

If you have the skills and experience, we have the financial options. For those who have been denying themselves the opportunity to turn their dreams into reality, 2022 is the year to change everything. At the South Florida Funding Group, we offer several leading services including funding programs, credit repair, and other forms of advice.

As you’ve seen in this guide, the financing options for your business all have pros and cons. As a general contractor business, you need to select an option that will support your short-term needs without affecting your long-term goals.

Which option is best for you? This is impossible for us to say because there is no universal answer to this question. For example, those with bad credit will need to explore alternative lending solutions in more detail than those with strong credit. Alternatively, those who need funding for everything will need a loan whereas those looking for working capital can look at a merchant cash advance, business line of credit, or equipment financing.

Contact the professionals at the South Florida Funding Group today for expert advice to take the first step on the ladder. Good luck!


The business funding you need when others say No!.

2569 Bay Pointe Dr.
Weston FL 33327




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