CONSTRUCTION LOANS
Take your business to the next level and invest in real estate by utilizing one of our Real Estate Loans. Real estate can be a great way to add to your asset portfolio or to own your work or retail space, but most businesses can’t afford to do it alone. Our extensive network of lenders will help you find the short-term or long-term financing options you seek.
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WHAT IS A CONSTRUCTION LOAN?
Construction loans are unique in that they are structured to pay out in stages based on an agreed-upon construction plan. That benefits the developer in multiple ways. First, you pay less interest on the total project than you would if you took out a lump sum at the beginning of the project. Second, each stage is inspected to verify completion before the next stage proceeds and money is paid out.
The challenge for many developers is that traditional banks prefer to remove themselves from all but the most proven teams. The loans are complex, and with variables, they are relatively more risky for the lender.
Loan brokers with experience in real estate and construction lending give developers of all sizes a competitive advantage. We source the funds through our network of construction oriented lenders. Together, the broker and lender team is better prepared to evaluate your construction plan and to work to the win-win than a traditional lender.
ADVANTAGES OF CONSTRUCTION LOANS
- Financing can be used for any stage of construction.
- Milestones help keep construction on track.
- Make interest-only payments while construction is ongoing.
- Construction loans can transition into long-term financing.
For businesses that want to act as contractor on their build, you’ll need an Owner-Builder Construction loan. For those in the fix-and-flip markets, turnaround is fast enough that a hard money loan is the best option. If you wish to hold the property instead of sell at the time construction is completed, a term to perm construction loan sets your terms at the outset to reduce the risk of surprise market changes at the time of project completion.
Maturity dates will depend on the loan and the lender. Loan terms can be anywhere from five years to twenty years, with a longer amortization period.
You can find construction loans from many sources: credit unions, private lenders, and the SBA are just a few. We have connections with all types of lenders who can get you the funds you need at the right rates.
In most cases, yes, you will be asked to make a down payment. A standard amount is 20% of the loan value. If you need a lender with different requirements, let us know and we’ll connect you.
