Construction Capital in Houston, TX: What's Available Right Now

Houston, TX market snapshot

Source: U.S. Census QuickFacts + BLS QCEW (NAICS 23)

What HB 700 actually changed

Texas HB 700, signed in 2023, brought commercial financing transactions — including merchant cash advances, factoring, and other non-loan structures — under a state disclosure regime broadly similar to what California (SB 1235), New York (SB 5470), Virginia (HB 1027), Utah, and Connecticut have already enacted. The core requirement: a funder offering a commercial financing transaction to a Texas-domiciled business must register with the state and provide a standardized disclosure of total cost, finance charge, periodic payment, and APR-equivalent metrics before the borrower signs.

The disclosure standardization is genuinely good for borrowers — it forces apples-to-apples comparison instead of letting factor rates and origination fees obscure the all-in cost. The transition friction is real, though. Some funders completed their Texas registration and compliance work promptly; others are still working through it. We've taken the position that we won't submit a Texas file to a funder whose registration status we can't verify on the day of submission, and we won't route only to the registered subset because that narrows your offer set and may not produce the best price.

Houston's construction economy: why the cash-flow shape is different

Houston construction isn't a single industry. The metro has at least four overlapping construction economies, each with a distinct cash-flow rhythm.

The energy-corridor work — refinery turnarounds, petrochemical plant maintenance, LNG export build-out along the upper Gulf coast — runs on project schedules measured in months and milestones, with net-45 to net-90 payment terms and large material outlays at the front of the cycle. The binding constraint is typically the float between subcontractor payroll (weekly) and the next milestone draw (45 to 90 days).

Commercial build — office tower, mixed-use, medical and institutional — runs on a similar long-cycle pattern but typically with general-contractor-driven payment timing rather than owner-direct.

Residential and infill construction in the inner Loop and the Heights, plus the suburban tract development across Fort Bend and Montgomery counties, runs on shorter cycles but with the developer-pay timing risk that's common to residential GCs everywhere.

Storm-restoration work — hurricane response, flood remediation, the post-event roofing surge — runs on insurance-carrier and FEMA timing, which is its own category and rarely runs to schedule.

The MCA discussion is different for each of these. We're not having any of those conversations in Texas right now, but the underlying capital problems are real and there are non-MCA options for each.

What Houston contractors should look at instead

AR financing (also called invoice financing or factoring against contracts) is widely available in Houston through both bank-affiliated and specialty asset-based lenders. For a contractor with signed contracts and milestone billing schedules, AR financing typically prices below MCA on an all-in basis and is structured as a recurring facility rather than a one-time advance — better fit for the construction cash-flow shape.

Materials financing — lien-secured working capital against the largest line item in most construction jobs — is offered by major construction supply houses (Ferguson, HD Supply, Builders FirstSource) plus a number of specialty lenders. Often the cheapest near-term capital available for a contractor because the lien on the material derisks the position.

SBA 7(a) loans through Houston community and regional banks (Frost, Cadence, Texas Capital, Prosperity, plus the SBA preferred-lender network) work for working capital and equipment up to $5M. The approval cycle is 6 to 10 weeks even with a clean file, so SBA is not the answer for an immediate need — but for structural capital it's usually the cheaper money. SBA 504 covers owner-occupied real estate (your office or yard) on similar timelines.

Equipment financing for the larger machinery — excavators, lifts, cranes, specialty pump trucks — is widely available through OEM captives (Caterpillar Financial, John Deere Financial) and independent equipment lenders. Faster than SBA, slower than MCA, and typically much cheaper than either for the equipment use case.

For bonded contractors with active surety capacity, traditional bank credit and SBA are usually accessible — the surety underwriting has already validated the financial picture.

Why we paused rather than worked around it

The temptation in regulatory transitions is to keep deal flow moving — find the funders who've already completed registration, submit only to them, and keep operating. We considered that and decided against it for two reasons.

First, the registered-funder pool today is smaller than the full panel, which means your offer set is narrower and you may not be seeing the best-priced quote available. Quote optimization for the borrower is the whole reason a broker exists; if we can't shop the full panel, the value we'd be delivering is diluted.

Second, the regulatory picture is still in motion — rulemaking, enforcement guidance, and amendments are all in flight. A deal that's clearly compliant today might need restructuring tomorrow. Rather than place borrowers in deals that may need re-papering, we're sitting out new originations until the picture stabilizes and the full panel is operational in-state.

If you want our read on your specific situation

We're not taking Texas applications through the standard /apply flow right now. If you're a Houston contractor and want our honest read on what capital option fits your situation — AR financing, materials credit, SBA, equipment financing, or waiting for the MCA panel to re-open — email contact@commerafunding.com with your business size, monthly revenue range, and what you're trying to fund. We'll respond with a straight answer about whether we can help directly, point you at a non-Commera resource if that's the right move, or flag you for outreach when we re-open Texas originations. No application required for that conversation, and we won't pull your credit.

The line we hold: we don't broker into Texas right now, but we don't pretend the need isn't real. Houston construction doesn't pause for regulatory transitions, and we won't pretend our pause is anything other than a Commera-side decision.

What you'll need to apply

• Four months of business bank statements (PDFs from the bank's portal — not screenshots)
• Driver's license, front and back
• Voided business check from the operating account
• EIN (sole proprietors enter SSN where prompted)

About 5 minutes for pre-qual. Full underwriting takes another 6 minutes after that.