A commercial construction loan is a financing solution that provides businesses and developers with the necessary funds to cover the costs of constructing a new commercial property or renovating an existing one. Schedule a meeting with us to determine if your project is eligible.

While regular commercial loans are typically used for purchasing existing properties or refinancing, commercial construction loans are specifically designed to finance the construction or major renovation of commercial properties. They often come with progressive drawdowns, allowing borrowers to access funds in stages as the construction progresses.

The term for a commercial construction loan is generally short-term, ranging from 6 months to 24 months, although we do have some lenders that will lend up to 36 months. Once construction is complete, borrowers usually refinance to a longer-term commercial mortgage.

Yes, most lenders require a deposit, typically ranging from 10% to 30% of the total project cost. The exact amount can vary based on the project’s size, the borrower’s creditworthiness, and the lender’s policies.

Yes, many lenders offer commercial construction loans that can cover both the cost of acquiring the land and the subsequent construction costs. However, terms and conditions may vary based on the lender and the specifics of the project.

During the construction phase, many lenders offer the option to make interest-only payments. This means that you’ll only pay the interest on the drawn amount and not the principal. Once construction is complete, the loan often transitions to a regular payment structure including both principal and interest.

Funds from a commercial construction loan are typically disbursed in stages or “draws.” As construction milestones are reached, borrowers can request portions of the loan to cover costs, ensuring they only draw what they need and only pay interest on the amount utilized.

If a project runs over budget or time, it’s crucial to communicate with the lender as soon as possible. Depending on the situation and the lender’s policies, additional financing or loan modifications might be available. However, it’s essential to factor in contingencies when planning the project budget initially.

While credit scores are an important factor, lenders also consider other aspects like project viability, experience of the developer, location, market conditions, and the overall financial health of the borrowing entity. A strong credit score can help in securing favorable loan terms.

Yes, many businesses refinance their short-term commercial construction loans into longer-term commercial mortgages once the construction is complete. This allows for a more manageable repayment structure aligned with the property’s operational income.