Construction companies have a love-hate relationship with merchant cash advances. The industry desperately needs working capital — for materials, equipment, payroll between draws, and bid deposits — but the project-based revenue pattern makes underwriting more complex than a typical retail or restaurant file.
The fundamental challenge is deposit inconsistency. A restaurant deposits money every day. A construction company might receive a $30,000 draw payment, followed by nothing for two weeks, then another large deposit. This lumpy deposit pattern makes traditional MCA underwriting difficult because funders need confidence in daily repayment ability.
Despite this, many MCA funders actively fund construction companies. The key is showing sufficient average monthly revenue and maintaining reasonable daily balances between large deposits. If your account shows $50,000 or more in monthly deposits with an average daily balance above $5,000, you are in a strong position. Funders who specialize in construction understand the payment cycle and will structure terms accordingly.
There are specific red flags that sink construction files. The biggest one is large cash withdrawals. Construction is a cash-heavy industry, and many contractors pay subcontractors in cash. While this is common, it looks terrible on bank statements. Underwriters see large cash withdrawals as revenue leakage — money leaving the business that cannot be traced. If you are planning to apply for an MCA, reduce cash withdrawals for 60 to 90 days and pay subs via check or transfer instead.
Equipment purchases on the statements can actually help your case. They show the business is investing in its future and has enough cash flow to make capital purchases. What hurts is when large equipment debits cause the account to go negative.
Time in business matters significantly for construction. Funders generally want at least 12 months of operating history for construction companies because the industry has high failure rates in the first year. A construction company with 3 or more years of history and consistent revenue will get meaningfully better terms than a first-year operation.
The typical construction MCA looks like this: advance amount of $30,000 to $100,000, factor rate of 1.25 to 1.45, term of 6 to 12 months, with daily or weekly ACH payments. Weekly payments are more common for construction because they align better with the industry's payment cycle. If a funder only offers daily debits, make sure your account can handle that between draw payments.
Before applying, review your statements for the telltale issues: large unexplained cash withdrawals, negative balance days, NSF fees, and irregular deposit patterns. Address what you can and use a pre-qualification tool to understand your position before submitting to funders.