Commercial Construction Loans

Commercial Construction Loans

Commercial construction loans can be a long and difficult process. Depending on the type of commercial construction loan and the type of commercial property being built it can also be very document intensive.

Types Of Commercial Construction Loans

There are essentially three types of commercial construction financing available:

  • commercial real estate construction loans – to build commercial property such as retail stores, office buildings, industrial and manufacturing plants, apartment complexes, hotels or mixed-use projects.
  • development loans with land acquisition – this type of loan is used to purchase commercial and/or residential zoned land as well as to develop the infrastructure and the single family or commercial building that will be built on the land.
  • builder financing – this type of financing is for the construction of pre-sold and built-on spec family homes, condos etc.

commercial construction loans

Usually twp types of loans are needed for financing a commercial construction project, and sometimes these are combined into one loan.

  • short term to provide funds for the construction phase of the commercial project
  • long term to provide financing for the long term to include project stabilization until it has reached a stage of occupancy.

Both of the above can be combined into one loan that covers the actual construction of the building and converts to a long term loan on completion of construction.

Commercial Construction Loans – Requirements

As with other loan types, these loans will go through the usual underwriting process and an appraisal will be required. Depending on the project additional documentation may be required such as soil tests.

Construction loans usually have terms of 12 to 18 months but this can vary depending on project size. The permanent portion of the loan can have terms of 5-25 years with 15-25 year amortization.

There is some flexibility in the above terms – please contact us to discuss your specific project.

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Loan options also available for: