Construction is, at heart, a cash-flow business. A contractor buys materials and pays crews long before the invoices for that work are paid — often 30, 60, or 90 days later, and sometimes with a slice held back as retainage until the job is done. When the price of materials is also climbing, that gap between money out and money in gets wider, and the credit a company has lined up becomes the difference between taking the next job and turning it down.
Small businesses across the economy are leaning on that credit. According to the Federal Reserve’s Small Business Credit Survey, about 45 percent of small employer firms applied for financing in 2025 — the highest share since 2021. Among applicants, the most sought-after products were business lines of credit, followed by term loans and business credit cards. Even so, roughly one in three firms that applied still faced a funding gap, receiving less than they asked for.
Construction feels that squeeze acutely. Input costs for new nonresidential construction have risen about 7 percent over the past year, according to industry analyses of federal producer price data, while payment cycles remain long. The result is a sector where healthy, growing companies can still run short of cash at exactly the wrong moment.
“You pay for the job long before you get paid for it — the credit you set up in advance is what lets you take the next one,” said Jamal Kaileh, a Houston-based construction and real estate operator. Kaileh, who has built and run companies across construction and development, said the firms that stay liquid tend to treat credit as infrastructure, not a last resort: they put a line of credit in place before they need it, keep business and personal credit separate, and time their draws to the project schedule rather than scrambling once a gap opens.
That discipline starts with building a business credit profile in the first place. The U.S. Small Business Administration and lenders generally point to the same fundamentals: register the business as its own legal entity, get an EIN, open accounts and vendor tradelines in the company’s name, and pay them on time or early. Over months, that history builds a business credit score that’s separate from the owner’s personal credit — which matters when a bonding company or bank is deciding how much to extend.
From there, the tools tend to fit different jobs. A business line of credit is built for exactly the timing problem construction creates: draw on it to cover materials and payroll during the gap, then pay it down when the client’s check clears. Business credit cards can handle smaller, recurring purchases and help build history, while term loans suit longer-lived needs like equipment. The common mistake, operators and lenders agree, is mismatching the two — financing a long project or a piece of equipment on short-term, high-cost money.
With costs likely to stay elevated, the pressure on cash flow isn’t going away. For construction firms, that makes business credit less a sign of trouble than a tool of the trade — and the companies that manage it as deliberately as they manage the build are the ones that keep their crews working and their projects moving.