What contractors are
actually asked to pledge.

In commercial funding, unsecuredusually means the funder is not taking a lien on a specific piece of property: your excavator, your truck fleet, your building. It rarely means that nothing is signed and nothing is filed. The useful question is not “is there collateral?” but what exactly is being pledged, and what happens if a job goes sideways?

That question is worth asking early, because collateral is one of the main reasons small businesses look past their bank in the first place. In the Federal Reserve Banks' most recent Small Business Credit Survey report, 42%of small employer firms that applied to an online lender said “no collateral was required” was a factor in where they applied, against 20% at large banks and 9% at small banks.

And it matters more in construction than in almost any other trade, because of what a contractor's balance sheet actually looks like.

Two assets dominate a construction company's balance sheet, and both are awkward collateral. The equipment is usually already financed, so the machine that reads as an asset is often securing the note that bought it. The receivables are large but contingent: billed against progress, subject to inspection, and held back by design.

Retainage is not a sign of a troubled job. It is written into the contract. On federal fixed-price construction contracts the government makes progress payments monthly as the work proceeds, and where satisfactory progress has not been made the contracting officer may retain a maximum of 10 percent of the payment until it is. Private and state-level contracts set their own retainage terms, and plenty of them are less generous than the federal rule.

Pledging also has a second-order cost here that other industries do not carry. Assign contract proceeds under the Assignment of Claims Act and the assignment must cover all unpaid amounts under that contract, may be made to only one party, and requires written notice to the contracting officer, the disbursing officer, and the surety on any bond applicable to the contract. In plain terms: a pledge you make to a funder is a pledge your bonding company learns about, and bonding capacity is what lets you bid the next job.

Which is why “just put up collateral” is poor advice for a contractor. The collateral a lender wants is either already spoken for, or pledging it quietly costs you capacity you need to keep working.

PIRS Capital's product is a purchase of future receivables at a discount, not a loan. That is a structural difference rather than a marketing one. In secured lending you borrow money and separately pledge something you own so the lender has recourse to it. In a receivables purchase the receivables are the subject of the transaction: PIRS buys an agreed portion of your future sales, and delivery happens as a share of revenue as it comes in.

Practically, that means underwriting reads your deposit history rather than a collateral schedule, and the amount available is typically a function of revenue rather than of appraised asset value. It also means delivery can flex with the draw cycle instead of demanding the same fixed payment in a month when a draw did not clear. All offers are subject to underwriting, qualification, and verification.

This holds whether you bill an owner directly as a general contractor or bill the GC as a specialty trade. Electrical, plumbing, HVAC, roofing, concrete, excavation: what underwriting reads is the deposit history, and a subcontractor's file is underwritten the same way.

Structurally different is not the same as “nothing is signed and nothing is filed.” Any commercial funding agreement, ours included, sets out what the funder's rights are if the receivables do not materialize as expected. So the checklist below is exactly the one we would want a contractor to bring to us — and because it would be a poor look to publish a checklist we would not answer ourselves, our own answers to the first two follow it.

Two of those six questions are the ones that decide whether “unsecured” means anything. Here is where PIRS Capital stands on both, in plain terms.

We do not file a UCC-1 when we fund your business. No financing statement goes on record at closing. We reserve the right to file one if an account defaults or default is threatened — it functions as a guarantee of performance, not as a claim staked against your assets on day one. That is a real difference from how much of this market operates, and it is worth confirming with any funder you are comparing us against: ask them when they file, not just whether they file.

A personal guarantee is required. Its scope is set file by file rather than by a house rule. On some agreements it is limited, reaching matters such as fraud or breach; on others it is broader and can extend to ordinary business decline. There is no single answer that is true for every deal, so we will not give you one here. Ask us what the guarantee on your file covers, and read the document itself before you sign it. We would rather have that conversation during underwriting than have you discover the answer later.

Which is also why you will not find us saying “no collateral required” anywhere on this site. The accurate version is narrower and more useful: no lien is filed at funding, a personal guarantee is required, and its scope depends on the file. Any funder unwilling to be that specific with you is telling you something.