Search “general contractor loans” and most of what comes back is generic small-business lending copy with a construction photo bolted on. That misses what actually constrains a growing GC. For a contractor who bids and self-performs work, the ceiling usually isn’t “can I get a loan” — it’s “can I get bonded for the next job,” and bonding capacity is set by your balance sheet, not your sales pipeline. Here’s what lenders and sureties actually look at, why bigger contracts squeeze working capital harder than smaller ones, how bonding capacity gets cut when a GC overextends, and where a line of credit fits into protecting it.
What “General Contractor Loans” Actually Cover
There’s no single “general contractor loan” product — and REIL Capital doesn’t originate ground-up construction-perm financing directly. What GCs actually use, often in combination, is a mix of working-capital tools sized to different problems: a line of credit for the recurring gap between funding a job and getting paid for it, a term loan for a single larger purchase like a truck or a piece of heavy equipment, bridge/working-capital financing for a specific mobilization crunch, equipment financing tied to the asset itself, and SBA 7(a) financing — arranged through REIL’s SBA lending partners, not underwritten in-house — for larger moves like a real-estate purchase or a major expansion. None of these is a construction-perm loan for a ground-up build; they’re the working-capital layer around it, keeping a GC’s existing jobs funded and its bonding capacity intact while the actual project financing sits on top.
What Lenders and Sureties Actually Look at for a GC
A general contractor gets evaluated on two related but separate tracks: the lender track (can this business service debt) and the surety track (can this business absorb the risk of a bonded job going sideways). Both come back to the same underlying numbers.
- Working capital relative to revenue. Sureties commonly want a GC’s working capital running around 5–10% of annual revenue — not a fixed dollar figure, a ratio that scales with how much work you’re taking on.
- Current ratio. A current ratio (current assets divided by current liabilities) in roughly the 1.5–2.0 range is the range sureties typically look for as a sign the business isn’t running too close to the edge.
- Backlog relative to working capital. How much contracted work is already on the books, measured against the working capital available to fund it — a GC with a big backlog and thin working capital reads as overextended even if every job is profitable on paper.
- Track record and bonding history. Completed jobs of comparable size, on-time performance, and an existing relationship with a surety carry real weight; a first ask for a much bigger bond than your history supports is a harder sell than a gradual step-up.
- Time in business and financial documentation. Standard lender diligence — tax returns, financial statements, bank statements — layered on top of the surety-specific numbers above.
None of this is exotic. It’s the same financial-health picture a bank wants before extending credit — sureties just apply it with a sharper eye toward “what happens if this specific job goes wrong.”
The Bonding Capacity Math
Bonding capacity isn’t a credit score or a handshake — it’s arithmetic tied directly to working capital. Sureties commonly extend a single-job bonding limit of roughly 10 times a contractor’s working capital, or somewhere in the range of $10–$15 of bonded backlog per $1 of working capital. A GC carrying $200,000 in working capital, in that framework, might qualify for a single-job limit somewhere around $2 million to $3 million — not an arbitrary number, but roughly what the math supports. Want to bid a bigger job? The bond won’t issue without the balance-sheet capacity behind it first. Performance-bond premiums themselves typically run 1–3% of contract value for qualified contractors, often tiered lower as contract size grows — but premium cost is rarely the real constraint. Capacity is.
Why Bigger Jobs Squeeze Working Capital Harder
This is the part that catches growing GCs off guard: the same math that unlocks bigger bonding capacity is also what a bigger job drains fastest. Construction is the slowest-paying major industry for collections — average days-sales-outstanding runs around 83 days, versus 7–30 days in retail or e-commerce. Layer retainage on top: 5–10% of contract value is withheld until project completion, and even a clean draw typically takes 5–10 business days to process. Payment delays are also getting worse industry-wide — 82% of contractors now wait 30+ days past the expected payment date, up from 49% two years earlier, and subs commonly wait around 56 days after submitting a pay application.
None of that is unique to any one contractor — it’s how the industry pays. But it scales with contract size. A GC moving from $500,000 jobs to $2 million jobs doesn’t just need a bigger bond; they need to self-fund proportionally more labor and materials for the same stretch before the money lands, on every job running at once. That’s the mobilization-capital gap that sinks contractors who scale revenue faster than they scale working capital.
The Trap: Overextend on Bonded Work and Lose Capacity
This is the tension worth naming plainly: taking on more bonded work than your working capital supports doesn’t just strain cash flow — it can get your bonding capacity cut. Sureties watch the same backlog-to-working-capital and current-ratio numbers on an ongoing basis, not just at the first application. A GC who wins several bonded jobs at once, funds them all through the same DSO-and-retainage lag, and lets working capital and the current ratio slip below what a surety wants to see can find the next bond harder to get, not easier — right as revenue is finally climbing. Growth that isn’t backed by working capital doesn’t just feel tight; it works against the bonding relationship a GC needs to keep growing at all.
How a Line of Credit Protects — and Grows — Bonding Capacity
This is where the recurring cash-flow gap and the bonding-capacity math connect to an actual financing decision. A revolving line of credit is built for exactly this kind of gap: draw against it to cover payroll and materials while a draw request or retainage payment is still processing, then pay it back down once the job pays out, and repeat on the next job. Used this way, a line of credit isn’t just working capital for its own sake — it keeps the working-capital-to-revenue ratio and the current ratio in the range a surety wants to see, instead of letting those numbers erode every time a bigger job hits the DSO lag. REIL Capital’s line of credit runs $25,000–$400,000 with 6–36 month terms; eligibility is 600+ FICO, at least 1 year in business, and $300,000 in annual revenue (about $25,000/month) — a narrower bar than REIL’s general lending products, so confirm these three figures specifically rather than assuming looser trio-level minimums apply to the line of credit. For the full mechanics of how a construction-specific line of credit works day to day, see our dedicated construction line of credit guide.
When a Term Loan Fits Better
A line of credit is the right tool for a recurring, open-ended gap. A single large, defined purchase — a new dump truck, an excavator, a piece of equipment you need once and then own — is a different kind of need, and a term loan often fits it better: a fixed amount, a fixed schedule, and a predictable payment rather than a revolving balance you’re managing job to job. REIL Capital’s term loan runs $5,000–$1,000,000 with 6–48 month terms, with qualification typically around 500+ credit, 6 months in business, and $25,000/month in revenue (ideal profile closer to 3 years in business, $60,000/month revenue, 600+ credit). If the need is genuinely open-ended and recurring — funding the DSO/retainage gap across whatever jobs are active at any given time — the line of credit is still the better-fitting tool; the term loan is for the one-time buy.
The Honest Bottom Line
For a general contractor, the real growth constraint usually isn’t finding a lender willing to say yes — it’s keeping working capital healthy enough that a surety keeps saying yes to bigger bonds. Bonding capacity is math, not goodwill, and it’s math a contractor can manage: protect the working-capital-to-revenue ratio and the current ratio, and bonding capacity tends to follow. A line of credit ($25,000–$400,000, 6–36 months, 600+ FICO/1+ year in business/$300,000+ annual revenue) is REIL Capital’s fit for the recurring draw-to-draw gap that eats at that math on every active job. For a single larger equipment or vehicle purchase instead, a term loan ($5,000–$1,000,000, 6–48 months) is the better-suited product. REIL Capital’s application takes about two minutes, and approval is possible within 24 hours on some products, though that varies by the product and the file.
Frequently Asked Questions
Does REIL Capital offer ground-up construction loans for general contractors?
No — REIL Capital doesn’t originate ground-up construction-perm financing directly. What REIL offers general contractors is the working-capital layer around a project: a line of credit or term loan to cover payroll, materials, and equipment while draws and retainage are processing, plus access to SBA 7(a) financing through REIL’s lending partners for larger moves like real estate or expansion.
Why would my bonding capacity get cut if I’m winning more work, not less?
Because bonding capacity is set by working capital relative to backlog, not by how much work you’ve won. Sureties commonly extend a single-job limit around 10 times a contractor’s working capital and want working capital running roughly 5–10% of annual revenue with a current ratio near 1.5–2.0. A contractor who takes on more bonded jobs than that working capital supports — funding them all through construction’s typical 83-day payment cycle and 5–10% retainage — can see those ratios slip, and sureties respond by cutting capacity, not extending it further.
How does a line of credit actually help with bonding capacity?
By covering the draw-to-draw and retainage gap without pulling down the cash reserves a surety is counting as working capital. Drawing on a revolving line to fund labor and materials while a payment is processing, then repaying it once the job pays out, keeps the working-capital-to-revenue and current ratios healthier than repeatedly draining cash reserves job after job — which is exactly what a surety is watching when deciding whether to raise, hold, or cut a contractor’s bonding limit.
What credit score and revenue do I need to qualify for REIL Capital’s line of credit?
REIL Capital’s line of credit requires a 600+ FICO score, at least 1 year in business, and $300,000 in annual revenue (roughly $25,000/month). That’s a narrower bar than REIL’s general lending minimums for products like term loans, so it’s worth checking these specific figures rather than assuming looser eligibility applies to the line of credit.
