If commercial real estate was limited to business owners purchasing existing properties to expand their companies, we would not experience the diversity that makes our economy thrive. Commercial construction loans help business owners and investors fund their visions rather than fit into an existing mold that might not help them reach their goals.
What Is a Commercial Construction Loan?
Commercial construction projects need a reliable cash source to run smoothly and avoid delays. Multiple commercial construction loan programs are available that provide cash flow to business owners and investors so they can complete their projects successfully and on time.
A commercial construction loan helps borrowers accomplish the following objectives:
- Building new structures
- Expanding upon existing structures
- Rehabilitating properties in disrepair
- Repositioning properties to better align with the company’s business plan
Commercial Construction Loans: A Short-Term Financing Option
Commercial construction loans provide funding for a real estate development’s construction and lease-up phases. Due to this limited time frame, commercial construction loans are considered a short-term financing option. After the development meets minimum occupancy requirements, a long-term financing plan takes over. Some commercial construction loans combine both types of financing for the borrower’s convenience.
Types of Commercial Construction Loans Available
If you are in the market for a commercial construction loan, you have several choices. Here are a few examples of the types of programs you might explore with our assistance:
- Loans with convenient 24-month terms
- Financing provided by life companies
- Permanent loans with earn-outs to make additional funding available when you need it most
- Layered financing options to maximize your LTC ratio
Benefits of Our Commercial Construction Loans
Commercial construction loans don’t have to be costly and confusing! Here are some of the benefits you’ll experience when you work with us to obtain commercial property financing:
- Minimum loan amounts of $1 million
- Flexible loan terms, allowing you to have easy access to cash and a say in your repayment schedule
- An LTC of up to 70% is permitted
- The borrower makes interest-only payments during the construction phase, and the principal is due at a later time
- Non-recourse loans are available for amounts exceeding $20 million
Getting Approved for a Commercial Construction Loan
Here are a few factors that lenders consider during the commercial construction loan approval process:
- Loan-to-Value (LTV) and Loan-to-Cost (LTC) ratios
- Debt Service Coverage Ratio (DSCR)
- Net-Worth-to-Loan-Size Ratio
- The value of the completed project must exceed construction costs
Contact Us Today!
Commercial construction loans can be customized to ensure your company’s financial and real estate success. Do you need a commercial construction loan to execute the next phase of your business plan? Contact us today, and let us structure a financing solution with your business’s best interests in mind!