Construction Funding: How to Keep Projects Moving

Florida's construction industry is booming. New developments, hurricane rebuilds, commercial retrofits — the pipeline is full. But there's a dirty secret: construction businesses often experience their worst cash flow precisely when they're busiest.

Here's why — and what to do about it.

The construction cash flow gap

A typical construction job works like this: you win the contract, purchase materials, pay your crew, and get paid by the client at milestones — 30%, 60%, final. In theory, it works. In practice, materials have to be ordered upfront, labor is paid weekly, and clients routinely delay milestone payments.

The gap between when money goes out and when it comes in can stretch to 45–90 days on a large project. For a contractor running multiple jobs simultaneously, this isn't a minor inconvenience — it's an existential threat.

The two most common cash crunches in construction

1. Material cost spikes — Lumber, concrete, copper wiring. Prices can jump 15–20% in a short window. If your bid locked in prices three months ago, you're eating the difference unless you can act fast.

2. Payroll gaps — Missing payroll is not an option. Your crew walks, your project stalls, your reputation suffers. When a client payment is 10 days late and payroll is Friday, you need a bridge.

How construction businesses use Luma

Most construction businesses that come to Luma fall into one of two categories:

Category 1: Bridge to payment — "I have $85K in receivables due in 30 days, but I need $40K this week to keep two jobs moving." A short-term cash advance bridges the gap and is repaid when the invoice clears.

Category 2: Growth capital — "I just landed a $600K contract and I need to scale my crew and purchase materials I couldn't afford without upfront capital." Equipment financing or a working capital advance funds the ramp-up.

What lenders look for in construction businesses

Construction businesses sometimes have irregular monthly revenue — big months when projects close, thin months in between. Most MCA lenders understand this. What they want to see:

• Consistent annual revenue ($120K+ is a common threshold)
• Demonstrated project pipeline (signed contracts help)
• 6+ months in business
• No chronic overdrafts

The story your bank statements tell matters more than any single bad month.

The right product for the right problem

• Cash advance: Best for bridging a specific, short gap (payroll, materials, equipment). Repaid over 6–12 months.
• Equipment financing: Best for purchasing specific equipment — crane, excavator, fleet vehicle. The asset itself often secures the loan.
• Line of credit: Best for contractors who need revolving access to capital across multiple projects. Draw what you need, repay, draw again.

If you're in construction and you're trying to figure out which option fits your situation, Luma's advisors know this industry. Start by checking your eligibility — no credit impact, takes about a minute.