What advance rate should I expect on construction invoices?

Construction invoices typically receive 80-90% advances. The remaining 10-20% (minus the factoring fee of 1-5%) is released when your GC or project owner pays the invoice in full.

Do I need good credit to qualify for construction factoring?

No. Factoring approval is based primarily on your customers' (debtors') creditworthiness, not yours. If your GCs and project owners have strong credit, you can qualify even with imperfect personal or business credit.

What's the difference between recourse and non-recourse factoring?

With recourse factoring, you're responsible if the GC doesn't pay. Non-recourse factoring (typically 1-2% higher in fees) means the factoring company absorbs the loss if the debtor defaults — protecting your cash flow.

Can I factor invoices from government construction projects?

Yes, but government contract factoring requires an Assignment of Claims under the Federal Assignment of Claims Act. Government receivables often get the best rates (1-2%) because of the low default risk.

How does construction factoring compare to a bank line of credit?

Factoring is faster (24 hours vs. 30-60 days), requires no collateral beyond your invoices, and scales automatically with your revenue. Bank lines are cheaper long-term but require strong financials and personal guarantees.

Published: March 31, 2026·Last updated: May 16, 2026·By Ed Freeman, Capital Advisor — PeerSense

What is the best financing for construction services at 80-90% advance rate LTV?

Construction invoice factoring advances 80-90% of approved receivables within 24 hours, with the balance (minus a 1-5% fee) released when your general contractor pays. Unlike traditional loans, approval is based on your GC's creditworthiness — not yours. This means newer contractors with strong contracts can access capital immediately without adding debt to their balance sheet.

Published by PeerSense Capital Advisory · Written by Ed Freeman, Founder

Prime: 6.75% 10-Yr Treasury: 4.25% Est. Invoice Factoring Range: 1% - 5% per invoiceas of Mar 19, 2026

Construction Services

Invoice Factoring for Construction Contractors

Construction contractors waiting 30-90 days for GC payments? Get 80-90% of your invoice value funded the same day. No debt, no equity — just your receivables working for you.

Minimum 30-35% equity required. Subcontractors and GCs with $50K+ monthly receivables from creditworthy general contractors or project owners.

Discuss Your Construction Services Deal Call (317) 452-6990

KEY TERMS

Deal Parameters at a Glance

LTV Target

80-90% advance rate

Est. Rate Range

1% - 5% per invoice

Term

Per invoice (30-90 day terms)

Recourse

Non-recourse available

DSCR

N/A — based on debtor credit

Closing Speed

Same day — funded in 24 hours

Min Loan Size

$10K

Loan Products

Invoice Factoring, Accounts Receivable Financing

FIT ASSESSMENT

When Is This the Right Fit?

Use construction factoring when you have signed contracts or completed work with approved invoices but cannot wait 30-90 days for payment. This is especially valuable when you need to cover payroll, buy materials for the next job, or fund mobilization costs. If your GCs are creditworthy but slow-paying, factoring converts your receivables into immediate cash without the underwriting delays of traditional bank loans.

Want the full program overview, current rate sheet, and underwriting matrix? See the Invoice Factoring & ABL guide →

ADVANTAGES

Key Benefits

Same-day funding — stop waiting 60-90 days for GC payments

No debt added to your balance sheet — this is asset monetization, not a loan

Approval based on your customer's credit, not yours — ideal for growing contractors

Scale your credit line as your project backlog grows

Non-recourse options protect you if the GC defaults

ALTERNATIVES

Strategic Alternatives

Working Capital Line of Credit

If you prefer a revolving credit line and have 2+ years of financials

Learn more

Equipment Financing — Construction/Heavy

If you need to finance specific equipment rather than cover cash flow gaps

Learn more

SBA 7(a) Loan

If you want longer-term working capital and can wait 30-60 days for SBA approval

Learn more

Frequently Asked Questions

Most construction factoring companies fund within 24 hours of submitting an approved invoice. Initial setup takes 3-5 business days, but after that, same-day funding is standard for verified receivables.

See Related Rates by Program

PeerSense covers the full commercial capital stack. Rates and structures across our money pages — updated weekly.

SBA 7(a) & 504

5.50–11.75%

Up to $5M acquisition / real estate / equipment, 10% down

See current rates

CMBS Conduit

5.60–7.10%

10-yr non-recourse fixed, $5M–$500M+, fully assumable

See current rates

Bridge Loans

9.00–14.00%

12–36 mo transitional, SOFR + 470-970 bps, 65-75% LTV

See current rates

DSCR Investor

5.95–8.50%

30-yr fixed rental, qualifies on property cash flow

See current rates

Equipment Financing

5.50–12.00%

Loan, lease, SBA 504, vendor, captive — Section 179 eligible

See current rates

Hotel Financing

5.85–11.75%

CMBS + SBA 504 + bridge + PIP across all flags

See current rates

Mezzanine Debt

11.00–18.00%

Subordinate to senior, $1M–$50M, capital stack fill

See current rates

Private Credit

7.80–18.00%

Non-bank flexibility, unitranche, recap, transitional

See current rates

No-Doc CRE

7.50–11.50%

Limited-doc commercial, asset-based underwriting

See current rates

Connect with PeerSense — Direct Capital Advisory

PeerSense pre-underwrites every deal before presenting it to our institutional capital sources. With 500+ lender relationships and live market rate intelligence, we match your construction services deal with the right capital source — right now.

Scan Your Deal (30 sec)Tell Us About Your Deal Call (317) 452-6990

No upfront retainer · Fee at closing only · Complimentary initial consultation

Published by PeerSense Capital Advisory · Written by Ed Freeman, Founder. Updated March 2026.

Disclaimer: The information on this page is provided for educational purposes only and does not constitute financial, legal, or investment advice. Rates, terms, and availability are subject to change based on market conditions, property characteristics, and borrower qualifications. The rate ranges cited reflect approximate market pricing as of March 2026 and may not reflect current conditions at the time of reading. PeerSense is a capital advisory firm, not a lender. We do not originate, fund, or service loans. All financing is provided by third-party lenders subject to their own underwriting criteria and approval processes. Borrowers should consult with qualified financial and legal professionals before making any financing decisions.