Loan-to-cost
Compares the loan to total project cost, including land, hard costs, soft costs, financing costs and contingency.
Solutions
Construction financing for commercial development plans.
Project-based capital for experienced sponsors with a defined budget, permit path, equity plan, draw schedule and takeout strategy.
Development capital
Construction lenders size risk before they size proceeds.
Construction financing is reviewed through loan-to-cost, as-complete loan-to-value, project budget, contingency, borrower equity, sponsor track record and exit strategy.
Draws are typically released as work progresses, subject to inspection and lender conditions. A strong submission explains not only what will be built, but how the project will be completed, stabilized, sold or refinanced.
Sizing tests
Two common constraints guide construction loan proceeds.
As-complete value
Compares the loan to the appraiser's projected value once the project is complete.
Takeout strategy
Shows how the construction facility will be repaid through sale, refinance or permanent term debt.