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Contractor Financing · 2026

Contractor Business Acquisition Loans

Thinking about buying an existing contracting business? Here is how acquisition funding works, what a lender reads in the deal, and where working capital fits around the purchase.

Short answer: Buying a contracting business is usually funded by a mix of sources: the buyer's own cash, a seller note, and sometimes a bank or SBA-backed loan. Contractor Capital Advance funds the working capital around the deal, $25,000 to $5,000,000 based on business deposits, FICO 500+ considered, with funding in as little as 24 hours for qualified businesses.

Reviewed by the Contractor Capital Advance team · Updated October 2026

The ways contractors fund a business purchase

Most deals combine several sources. Each one has a different cost, speed and paperwork load.

SourceWhat it coversWhat to expect
Your own cashDown payment and closing costsMost lenders want the buyer to put real money in.
Seller notePart of the price, paid over timeTerms are negotiated directly with the seller and often reduce what a bank must fund.
Bank or SBA-backed loanA large share of the purchase priceLonger approval, tax returns, a valuation and collateral are typical.
Working capitalCosts around the deal: payroll, materials, insurance, bondingFaster and read from business deposits. It does not replace purchase-price funding.

What a lender reads in a contractor acquisition

The deal is judged on the business you are buying and on you.

  • Revenue and deposits. Several years of steady deposits, not one strong year.
  • Backlog and customers. Signed work, repeat clients and how concentrated the revenue is.
  • Owner dependence. Whether the seller personally wins the work and whether it transfers.
  • Licenses and bonding. Whether they carry over to the new owner and how long that takes.
  • Equipment condition. Trucks and tools that need replacing soon change the real price.
  • Your experience. Time running crews or projects in the same trade.

Where working capital fits around the purchase

The first ninety days after closing are when cash runs tight.

Use of fundsWhy it comes up
PayrollCrews are paid weekly while the first invoices under new ownership are still outstanding.
Materials and mobilizationSuppliers may reset terms with a new owner and ask for payment up front.
Insurance and bondingPolicies and bonds are often repriced or reissued at closing.
Equipment repair or replacementDeferred maintenance shows up fast once you run the fleet.
Marketing and rebrandingSigns, vehicle wraps and a website update under the new name.

Products that fit after closing

Pick the one that matches how the cash will be used.

Working capital

Day-to-day cash for payroll, materials and mobilization.

Business line of credit

A reusable pool you draw on between jobs and repay.

Bridge financing

Covers costs while a draw or a large invoice is still unpaid.

Contractor cash advance

Cash against future deposits, repaid as a share of sales.

How to prepare

A cleaner file gets a faster answer.

  • Three months of business bank statements for the business you run.
  • A one-page summary of the deal: price, sources and timeline.
  • A list of any existing advances or loans and their payments.
  • Your trade license and insurance details.

See the full picture on our financing for contractors page, or start an application.

Frequently asked questions

Can I get a loan to buy a contracting business?
Often, yes, but the purchase price is usually funded by a mix of sources: your own cash, a seller note, and sometimes a bank or SBA-backed loan. Those lenders typically ask for tax returns, a valuation and a longer timeline. Contractor Capital Advance does not replace that process; it funds working capital around the deal once the business is yours or under contract.
What does a lender look at in an acquisition?
The target business’s revenue and deposits over several years, its backlog and customer mix, the owner’s role in winning work, its equipment and licenses, and your own experience running a crew. Clean books and steady deposits make a deal easier to fund.
Where does working capital fit in a purchase?
Right after closing. New owners often face payroll, insurance changes, bonding, a deposit on materials and equipment repairs before the first invoices under new ownership are paid. Working capital or a line of credit covers that stretch.
Do I need good credit?
Not necessarily for working capital. We consider owners with a FICO score of 500 or above, and approval is weighted toward your business deposits. The application starts with a soft credit pull, so applying does not affect your score. Purchase-price lenders usually look harder at credit.
What documents should I gather?
For working capital, about three months of business bank statements and basic business information. For a purchase-price loan expect tax returns, financial statements for the target, the purchase agreement and a business valuation.
How fast can funding arrive?
Decisions move fast, and funding can arrive in as little as 24 hours for qualified businesses. A purchase-price loan takes much longer.
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