How a Construction Company Used a Business Line of Credit to Jumpstart a $120,000 Renovation Project
Fast Funding for Commercial Construction: The Challenge
A commercial construction company in Orlando,FL, recently secured a $120,000 renovation contract. Like many construction companies, they needed to cover essential upfront costs: materials, permits, and subcontractors, before receiving any client payments.
Their immediate need: $40,000 to start the job.
Flexible Financing Solution: $150,000 Line of Credit from Lend On Capital
Lend On Capital provided a flexible business line of credit for the contractor, with a $150,000 credit limit. This revolving credit line gave the business owner the power to draw funds as needed, without taking on unnecessary debt.
How was the Line of Credit was used?
- Initial Draw: The owner withdrew $40,000 to cover startup costs.
- Short-Term Use: The funds were used for 2 months and fully repaid once the client paid their invoice.
- Interest Savings: Interest accrued only on the $40,000 for those 2 months, not on the entire $150,000 line or for the whole year. At a 12% annual rate, the total interest cost was $800.
- Ongoing Access: The remaining $110,000 stayed available for emergencies or new projects. For example, If another job needed $25,000, the owner could draw it instantly with no new application required.
- Once repaid, the full $150,000 line is available again for future needs.
Why a Business Line of Credit is Smart for Construction Projects
Use Only What You Need, When You Need It
A line of credit enables construction companies to borrow only the amount required for each project phase, helping them manage cash flow without overextending their debt.
Pay Interest Only on Funds Used
Unlike a traditional loan, you pay interest only on what you draw—not on the full credit limit. This keeps costs low and predictable.
Perfect for Covering Upfront Costs and Managing Project Timing
Construction timelines can be unpredictable. A business line of credit ensures you’re always ready to cover materials, permits, and subcontractor payments, even before client funds arrive.