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Construction and Building Loans for Small Business

The Construction and Business (C&B) industry encompass a wide range of services that include several processes such as the establishment, maintenance, renovation and eventual demolition of an infrastructure. Australia places high importance on this industry as it is dominated by 360, 000 small businesses, generates up to $400Bn annually with a growth rate of 0.5% providing 1.1 million jobs for Australian’s (IBIS, 2019).

However, there is a substantial issue between these statistics. Since the industry is made up of 98% small businesses like contractors, owner builders or handyman services, this means they are limited to having the adequate funds and resources to that of a bigger corporation to get a construction loan. This has caused high levels of negative cash flow throughout the building and construction industry.

Why cash flow is so important to Construction Businesses and why a business loan may help
It isn’t a secret that most Construction businesses suffer from cash flow problems, but before we can delve into the root cause of the issue, we first have to analyse the client payment scheme for most businesses under this industry. When a project comes under fruition a contract is developed that outlines progressive monthly payments between the business and the client.

Kendall Jone’s article cites that 8% of small businesses in the Construction and Building industry reported 8% of clients paid them on time, while 61% were usually paid on time (2018). Down the track, the numbers get worse as 27% of respondents rarely got paid on time and 4% never got paid on time (Jones, 2018). From these statistics alone we can conclude the underlying issue here is that businesses suffer from not receiving progressive payments from their clients. When cash isn’t coming in to pay employees or contractors and suppliers can occur which puts pressure on the business and contracting arrangements.

For a business that is operating within the Construction and Building industry, it is imperative to retain consistent cash flow whilst engaging in development projects otherwise losing your source of funds can have dire consequences on the development project and your reputation as a business that home buyers see. Small construction and building businesses in their nature are capital intensive as each development project is spread over a long duration where pre-planned manpower, equipment and machinery and quantity of materials are calculated before the venture is undertaken.

However not everything usually goes to plan, there may be additional materials or capital equipment needed for the task, and if your cash flow isn’t consistent during any stages of the development project, then your business may be in trouble as it won’t have the resources to fund the stages of construction for your client.
changes in the workforce can inevitably place detrimental impacts upon operating costs, profits, levels of service, customer value and managerial continuity (Tourism & Transport Forum Australia 2006).

Thus, forecasting cash flow is paramount to avoid future cash shortages, measure business performance and gain a competitive advantage within the Australian hospitality industry.

Speak to a lending specialist today on 1300 760 930 to get funds in 24 hours or start your application and apply now.

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How can Capify help you apply for a Construction Loan or Building Loan?

A recent survey was undertaken with a sample of small construction and building business’ where 84% of respondents faced issues with cash flow while 19% dealt with it on a regular basis (Jones, 2018). This is where loans work and Capify can help provide free quotes for small business finance with competitive comparison rates. Capify provides Australian businesses with an unsecured business loan for a quick financial solution to struggling businesses and provide loan terms of three to twelve months. Capify also offers credit card loans or merchant cash advances. This product’s terms and conditions are that the business must have an EFTPOS facility to apply for a business loan. Once funded with Capify, repayments are made through the EFTPOS facility.

The advantage of an unsecured loan is that it requires no personal or business asset, Capify does not offer interest rates either, they used a fixed-rate repayment. There is also less paperwork than a big bank’s process making it far easier and convenient for small businesses to alleviate their financial burden at an instant, however, Capify does not offer lines of credit.

Seeing how construction and building small businesses don’t get paid until the building contract is complete, there is a high risk for the company to have a negative cash flow during the operation of the project. Capify provides both short term and long-term solutions towards financial strained businesses in the construction and building industry as the process of providing financial aid is quick and intuitive with zero collateral damage with access to funds in 24 hours.

How could small businesses use the funds?

  • Pay Bills
  • Marketing
  • Hiring extra staff
  • Purchasing Stock
  • Improve Cash Flow
  • Purchasing a Business car or Truck
  • Renovating or Expanding the business
  • Upgrading or Purchasing Equipment

Capify Financing Options and Business Loan Products

Capify presents ideal solutions to businesses who struggle to sustain adequate funds or want to achieve certain business goals. We offer two principal products and services that aid businesses in achieving their goals; Merchant Cash Advance and Capify small business loan. The Capify business loan ranges from 5,000 to 300,000 dollars which are deposited into the customer’s account where they will then have the ability to fund their business. This unsecured business loan will then allow enterprises to improve the health of their business and be repaid through small daily transactions.

Moreover, another business product that Capify offer is Merchant Cash Advance, which works best for businesses who tend to experience fluctuating cash flow. Merchant Cash Advance refers to the business gaining a lump sum of money and repaying it through minor percentages of their EFTPOS transactions. This will benefit the business as they are less prone to shortages within their cash flow thus allowing them to increase capital whilst repaying the loan back. As well as this, Capify provides their expertise to customers, suggesting new ways to improve the cash flow, tailored to their specific business.

As the first business to do alternative lending in Australia and 11 years under the belt, Capify proudly declares itself as the most experienced alternative lender. In such a vast and growing industry, Capify has remained a solid pillar in FinTech within Australia and a leader in unsecured business loans in the SME market. Capify does not provide line of credits.

Capify is Australia’s first small business lender since 2008, we have built and maintained a google review of 4.5/5.

Speak to a lending specialist today on 1300 760 930 to get funds in 24 hours or start your application and apply now.

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FAQs

What are your interest rates?

We don’t use interest rates for our funding solutions.

Instead Capify offers an agreed total payback amount. The payback amount depends on the type of business you operate and the term you require the business finance for. This way your business knows up front the total costs, making managing your cash flow easy.

What are your loan amounts and terms?

Capify can lend your business from $5,000 to $300,000 in unsecured small business funding to SMEs. The repayment terms are flexible and depend on the monthly turnover of your business. Terms range from 3 months to 12 months.

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