Construction Loans

Not every building project starts out ready to go. They each require the correct facilities and
tools to begin correctly. And then once they start, many construction projects do not go as
planned. Construction loans can pay out based on milestone completion, allowing you to reduce your cost of money, only paying for the phases that have been fully completed.

Construction loans allow builders to meet their financial obligations with any construction project.
From renovations to ground up construction, construction financing keeps the project moving.

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What is a Construction Loan?

Construction loans bring the plan off paper and into fruition. With traditional bank loans, the builder or financier will receive a single lump sum of money before starting the project. This creates a less flexible financing situation. Construction loans work more closely to each project’s specific needs.

A construction loan uses the project’s milestones to break up the payments. So only when you reach a certain building milestone does the financing institution release additional funds. This takes into account real world variables to keep the project becoming overwhelming. So if a delay occurs, you do not have to worry about having an obligation for the entire amount of the loan.

In order to apply for a construction loan, you will need a construction plan, certified contractors and an exit strategy. These help signify your serious intentions to see the project through. You can use the loan to cover many aspects of the project, including inspections and permits before construction actually begins.

The Benefits of a Construction Loan

Over traditional loans, construction loans come with tons of advantages specifically geared towards construction projects. During construction you will only pay the interest amounts and not the principal for a lower installment. You can finance construction on vacant land, owner-occupied and investment properties. Construction loans can help you secure up to 90 percent of the funds needed for construction.

Speak with one of our loan brokers today to help connect you with the right funding you need to bring an idea to life.

Term Loan

A term loan offers a short term financial solution for your project. They typically get approved quickly so that you can break ground faster. They take only a fraction of the time it takes for a traditional loan to get approved. In fact, you can apply for and receive approval for a term loan in only a few days.

Term-to-Perm Loan

Term-to-perm loans best suit property managers that want to add a customized property to their portfolio. Builders know that any number of complications can cause delays and shift the financial needs of a project. Term-to-perm loans can help sort through these complications.

Small Business Administration (SBA)

Small builders can receive special funding backed by the Small Business Administration. These loans typically feature lower interest rates and many other government-backed perks. Of course, only small businesses can receive this type of financing. You can receive both 504 and 7(a) loans backed by the SBA.

When are Construction Loans not a good fit?

As with any loan, it’s important to assess the financial health of your business before taking on debt. We’ll help you understand all of the terms of your loan so there are no surprises down the line.

What if I want to build it myself?

If you intend to act as your own general contractor on the project, you’ll want to apply for a select type of commercial construction loan called an owner-builder construction loan. Unless you have experience as a contractor, however, these loans can be difficult to get.

Where can I get a Construction Loan?

We’ve spent years cultivating relationships with the best lenders in the business so you can take advantage of exceptional financing rates and terms. Tell us what you’re looking for and we’ll walk you through the best options available.

Is a down payment required for a Construction Loan?

Most construction loans do require a down payment. However, the amount you need to put down varies by lender. Give us your target payment and we’ll connect you with a lender who will work with you to get your project underway.