Getting a commercial construction loan can often be frustrating and difficult.
But sometimes just trying to find the best bank to get your commercial construction loan can be even harder.
This is simply because not all banks offer short-term commercial real estate construction loans.
That is why so many commercial property developers turn to private or hard money lenders for construction loans before transitioning to a permanent loan at a large bank.
Before you begin your construction loan search you should be familiar with a few items like:
INTEREST RESERVE FUND – an account with borrowed funds used to make interest payments during the term of the loan
INTEREST RATE – rates on commercial construction loans are always higher due to higher risk
POINT – a fee charged by banks – normally 1% of the loan amount (hard money construction loans charge 2 – 10 points)
DRAW – a series of payments, often monthly, the bank advances to you for your construction loan project
TAKE OUT COMMITMENT LETTER – a guarantee of funding from the permanent loan lender
I have provided the following list of local and regional banks that offer commercial construction financing. This will hopefully make your search easier:
Find the best commercial construction loan:
Many experienced commercial real estate developers recommend beginning your construction loan search at local regional banks.
Here are a few to choose from in various states around the country:
Commercial construction lenders in California
Commercial construction lenders in New York
Commercial construction lenders in Florida
Here is a list of national banks that do commercial construction lending. These are often good choices if you have a very large construction loan request.
Best Nationwide Commercial Construction Lenders
Commercial hard money loans are also available for construction loan financing.
Private money and hard money lenders can often provide the first round of your construction financing when large banks won’t.
Which is often the case since commercial construction loan requirements are so strict.
This is especially helpful when you need to fund your construction loan quickly.