Investor 101: What is a commercial construction loan pro-forma?

A significant element of the loan approval process for investor-owned commercial construction projects, a pro-forma is a form of paperwork requested from EVERY lender when it comes to a new build that is not owner-occupied. So what is a commercial construction loan pro-forma? It projects the financial path forward once a loan is approved. As part of the paperwork to help a bank balance risk with the investor’s ability...

Commercial construction loan requirements: what paperwork is needed?

When someone begins thinking about commercial construction loan requirements, the path is very different for an owner-occupied space versus a build for investing purposes. It wasn’t an impulsive decision to build, or a desire to spend months—even years—managing the construction process. It’s often led by a need for something not otherwise available. “This space isn’t working for my business any longer. It’s in the wrong location, needs too many...

Commercial construction loans: is it better to purchase land first?

These common obstacles can derail funding While some kickstart a new commercial construction project by talking directly to a builder, it often makes sense to first confirm you’re financially qualified to take on significant debt. Construction isn’t cheap and exploring how much debt you can comfortably afford may define scope of the build and where you buy land.

How to find the right commercial builder

  Wondering how to find the right commercial builder? Tapping the experience of a local banker who specializes in commercial construction is invaluable. They’re immersed in commercial projects every day and intimately familiar with what’s happening in their city. Commercial banks often play a quarterback role as a consultative resource – especially when building from the ground up is a new experience to the borrower – and they’re happy to share...

Should You Consider a Commercial Construction Loan?

Your business has grown, and it might be time to move into your own building. You’ve looked at commercial real estate for sale or lease, but just haven’t found what you’re looking for. The location or size is wrong, its age requires costly remodeling, or some other feature excludes every property you’ve seen. Should you build? Learning about the process, securing a loan and other basic details might help...

How do commercial construction loans work?

Unlike a simple mortgage to purchase an existing building or office condo, commercial construction loans can require multiple types of loans. It’s often a mix of short-term loans to cover different aspects of construction, followed by long-term funding for the mortgage. What is a commercial construction loan? The term “construction loan” typically refers to only the short-term loans intended to fund design/build costs, not including final mortgage loans once...