Why We Built This
Why Contractors Need a Different Playbook
Contractors don't fund like a generic business, because they don't operate like one. Revenue is lumpy. Receivables stretch 30, 60, sometimes 90 days. Equipment is expensive, and payroll runs whether or not clients have paid. The biggest growth moves — bigger jobs, bigger bonds, newer equipment — all demand capital before the work starts, not after.
Most lenders don't read it that way. They pull a tax return, see uneven quarterly revenue, and file you under risky. The truth is you run a seasonal, project-based business whose cash flow looks completely normal to anyone who actually understands construction.
Lumpy revenue, stretched receivables, and equipment-heavy balance sheets aren't red flags — they're how construction works. The products, tax moves, and stacking strategies in this guide are built around the pipeline that drives your business, not a generic credit box.
“Contractors are among the most mis-funded businesses in the country. The right product for a restaurant is almost never the right product for a GC. If your funding advisor can't tell you the difference between a working capital loan and an equipment loan for your specific job pipeline, you're talking to the wrong person.”
— Bobby Friel, Basecamp Funding · Founder
Real Scenario
Case Study: The Colorado GC Who Scaled with Stacking
A Denver general contractor had been bidding residential jobs for eight years. He wanted to move into commercial but couldn't bond jobs above $500K without more working capital and heavier equipment.
His bank offered a $200K working capital line. That alone wouldn't move the needle.
Instead of stopping there, he worked through a marketplace that structured a capital stack: a $200K working capital line for payroll and materials gaps, $450K of equipment financing for a used excavator and a skid steer, and an invoice factoring facility to accelerate cash from his existing commercial receivables.
Capital Stack (residential → commercial)
General Contractor, Denver CO
A $200K working capital line, $450K equipment financing (excavator + skid steer), and an invoice factoring facility — structured as one stack. Six months later, bonded a first $2.1M commercial tenant-improvement job that single-product funding couldn't have reached.
The lesson: contractors don't grow on one loan. They grow on the right combination of products working together.
The contractor in Denver didn't grow because he got approved for more capital. He grew because he got approved for the RIGHT COMBINATION of capital. Most contractors who “need more funding” don't actually need more funding — they need their capital structured differently. Is your current funding structure helping you grow, or is it the reason you've been stuck at the same revenue for two years?
Core Products
The 6 Funding Products Built for Contractors
Contractors need products designed for project-based cash flow. These are the six that do the heaviest lifting.
1. Equipment Financing
Why it matters: Finance excavators, skid steers, trucks, and trailers with the equipment serving as its own collateral — lower down payments than conventional lenders require. Best for buying new or used heavy equipment, vehicles, or specialized tools, and it pairs with Section 179 for a significant first-year deduction.
Key structure: Typical terms 2–7 years based on the equipment's useful life. Newer equipment gets better structure.
Learn more about Equipment Financing →2. Invoice Factoring
Why it matters: Turn 30-, 60-, 90-day receivables into cash in days. Especially valuable when your biggest clients pay slowly and payroll doesn't wait. Best for GCs, subs, and specialty trades with commercial or government receivables — the customer's credit matters more than yours.
Key structure: Per-invoice fees with an advance on the invoice within 24–48 hours. Bridges the gap between job completion and client payment.
Learn more about Invoice Factoring →3. Working Capital / Term Loan
Why it matters: Covers payroll during slow months, buys materials in bulk, funds mobilization for large jobs, and smooths seasonal swings. Best for businesses with a year or more of history and consistent bank deposits — the fastest product for general cash flow needs.
Key structure: Funded in days, repaid over 6–18 months. Not tied to specific equipment or invoices — cash in hand for whatever you need.
Learn more about Working Capital / Term Loan →4. Business Line of Credit
Why it matters: Revolving capital you draw from and repay as jobs flow through — pay interest only on what you use, which fits unpredictable project timing. Best for contractors with steady but uneven revenue who want a safety net always available.
Key structure: Approved credit limit, interest-only on draws, 12–24 month renewable draw periods.
Learn more about Business Line of Credit →5. Commercial Real Estate
Why it matters: Finance the shop, yard, or second location your operation is outgrowing — owner-occupied commercial property where the real estate anchors the transaction. Best for established contractors ready to own instead of lease: buying or refinancing a shop, yard, equipment storage, or office, and building equity instead of paying rent.
Key structure: $500K to $20M+, terms running long against the property; typically 10–25% down depending on the property and the structure.
Learn more about Commercial Real Estate →6. Purchase Order Financing
Why it matters: Funds the materials, labor, and subcontractor payments needed to fulfill a confirmed large contract before the client pays. Best for GCs or specialty subs with a signed contract from a creditworthy client and margins above 20%.
Key structure: Per-order advance using the PO itself as collateral. The fee is a percentage of the order value.
Learn more about Purchase Order Financing →Working with Basecamp
Contractors rarely need just one product. Our funding advisors analyze your full job pipeline, current equipment list, receivables aging, and growth targets first — then build a stack using the combination of products that fits your business. The right answer is almost never the first product a bank offers you.
The Tax Strategy
Section 179 — The Tax Strategy Contractors Overlook
If you bought equipment last year and didn't take a Section 179 deduction — or worse, paid cash for equipment when you could have financed it and kept the capital working — that's not a mistake you can undo. It's also not a mistake you have to keep making. Here's how contractors use this strategically going forward.
Section 179 of the IRS tax code lets you deduct the full purchase price of qualifying equipment in the year you buy it — instead of depreciating it over 5–7 years.
For contractors, this is massive. A $150K excavator financed at 10% down means you write a check for $15K, take delivery of the machine, and then deduct the FULL $150K against this year's taxable income.
written off the first year — on a $15K down payment. More write-off than you put down.
— Representative Section 179 example · illustrative figures
Why Most Contractors Miss This
They think they need to pay cash to get the deduction. They don't. Section 179 applies whether you pay cash, finance, or lease-to-own. The full purchase price is deductible in year one as long as you put the equipment into service by December 31.
How Contractors Use It Strategically
December equipment purchases: Buy before year-end to offset a high-profit year with a full Section 179 deduction.
Finance instead of paying cash: Pair a large equipment buy with equipment financing to preserve cash while still taking the full deduction.
Coordinate timing with your CPA: Plan purchases for the year you're in a higher tax bracket — the deduction saves more when your rate is higher.
This strategy is not loophole territory — it's what the tax code was literally designed for. The deduction limits are high enough that most contractor equipment purchases qualify fully.
Your CPA can model exactly what this saves you at your tax bracket. If your CPA doesn't bring up Section 179 before your next equipment purchase, get a new CPA.
Note: Tax strategies depend on your specific business structure, bracket, and annual profit. Section 179 rules and limits change. Always consult your CPA before making equipment purchases based on tax projections.
Use our equipment financing calculator to estimate payments and Section 179 savings on your next purchase.
Advanced Strategy
Capital Stacking for Construction Projects
Most contractors apply to one bank for one product and accept whatever number comes back. Capital stacking means building the right combination of products — each from the lender best at that piece — into a coordinated package.
A Typical Contractor Capital Stack
Commercial Real Estate
The shop, yard, or office. The longest-term, lowest-cost layer in the stack, secured by the property itself.
Equipment Financing
Trucks, trailers, skid steers, excavators. The equipment itself serves as collateral.
Working Capital Line
Payroll, materials, mobilization costs. Revolving — only pay interest on what you draw.
Invoice Factoring
Fast cash from outstanding receivables. Bridges the gap between job completion and client payment.
Each piece comes from a different lender who specializes in that product. You get better structure on every layer than any single bank would offer on a general-purpose loan.
Why Most Contractors Don't Stack
Most contractors apply to one bank, take whatever that bank offers, and never realize a coordinated stack across multiple specialist lenders is possible from a single application. The bank isn't hiding it — it just doesn't sell what it doesn't hold.
Working with Basecamp
Capital stacking is one of our core specialties for contractors doing $1M+ per year. One application, and your funding advisor builds the stack and manages every lender through closing. You don't fill out five applications — we do the coordination for you.
Combined Strategy
Invoice Factoring + Working Capital Combined
This combination is the single most powerful funding strategy for contractors with slow-paying commercial or government clients.
How It Works
Invoice Factoring
Turns your outstanding receivables into cash in days.
Working Capital
Handles mobilization, payroll, and materials gaps BEFORE the invoice is generated.
Together
You never wait for a client to pay before you can take on the next job.
Real Example
A concrete subcontractor with $400K in outstanding receivables and a new $200K job starting next week.
Without the combination: Wait 45 days for the receivables to come in. Turn down the new job or take on personal debt to fund it.
With the combination: Factor the $400K receivables for immediate cash to fund operations. Use a working capital line to fund mobilization and materials for the new $200K job. Never pause operations. Never miss a job window.
The tradeoff
Factoring and working capital both have costs. But the cost of MISSING a $200K job far exceeds the fees on the funding that lets you take it.
Avoid These Pitfalls
The 6 Funding Mistakes Contractors Make
These are the most common funding mistakes in the construction industry. Every one of them is preventable.
1. Applying for Working Capital to Buy Equipment
Why it matters: Working capital carries shorter terms and higher rates than equipment loans. Using it for equipment doubles your payment and kills Section 179 benefits.
The fix: Equipment purchase = equipment financing. Working capital is for payroll and materials.
2. Skipping Equipment Financing for “Bad” Credit
Why it matters: Equipment financing underwrites the equipment first, credit second. Scores in the 580–640 range get approved regularly.
The fix: Equipment financing is one of the most revenue-focused products. Don't assume you can't qualify.
3. Taking the First Offer from Your Bank
Why it matters: Your bank offers their products, not the best products. A one-bank approach costs thousands in unnecessary fees.
The fix: Compare at least 3 offers through a marketplace. Competition gets you better terms.
4. Ignoring Factoring Because It “Seems Expensive”
Why it matters: Compare factoring fees to the cost of waiting 60 days for payment — or missing a job entirely. The math flips.
The fix: Factor receivables strategically. Use it to fund growth, not to stay afloat.
5. Not Talking to Your CPA Before Equipment Buys
Why it matters: Section 179 is one of the most valuable tax strategies for contractors. Most miss it because they don't plan around their bracket.
The fix: Before any purchase above $25K, call your CPA. The tax savings often cover the down payment.
6. Waiting for the Perfect Terms
Why it matters: The job you miss while waiting costs more than a slightly higher rate. Contractors grow by moving, not by negotiating forever.
The fix: Take the best available offer today. Most lenders offer term reviews at 6–12 months — your rate can improve as your business grows.
Ready to Structure the Right Stack for Your Business?
One application, specialist lenders competing. Your funding advisor builds the combination that actually fits your job pipeline.
See What You Pre-Qualify For →Put It Into Practice
Your Contractor Funding Game Plan
Map your job pipeline.
What size jobs are you bidding in the next 6 months? What equipment, materials, and working capital do those jobs require?
Inventory your current assets.
What equipment do you own outright? What receivables are outstanding? What credit lines do you already have in place?
Identify the gap.
Where does your pipeline exceed your current capacity? Equipment? Working capital? Bonding?
Match products to the gap.
Equipment gap = equipment financing. Materials/payroll gap = working capital or line of credit. Receivables gap = invoice factoring. Shop/yard = commercial real estate financing.
Structure the stack.
Apply through a single marketplace that can coordinate multiple lenders. Don't chase one product at a time through multiple banks.
Coordinate with your CPA.
Time equipment purchases around your tax bracket. Plan Section 179 deductions before year-end.
Execute.
Pre-qualify today. Your funding advisor structures the stack. Most pieces fund in days to weeks — the full stack typically comes together within 30 days.
If your capital stack was restructured this quarter — right equipment, right working capital, right factoring facility, all coordinated — how much bigger would the jobs on your pipeline be 12 months from now?
Continue Learning
These three guides pair together to give you the full funding playbook.
The Commercial Funding Guide
Capital stacking, commercial real estate, and equipment portfolios — the structures behind every $1M+ transaction.
How to Read a Business Loan Offer
Factor rates, APR, red flags, and what every number means.
Pre-Application Checklist
Documents, timelines, and the mistakes that get applications declined.
Model Your Numbers
Equipment Financing Calculator
Estimate payments and Section 179 savings for equipment purchases.
Loan Cost Calculator
Compare total cost across any loan product.
Qualification Estimator
See what products you qualify for based on your business profile.
All calculators are free, no signup required.
