Construction Business Loans

What Do I Need to Know About Commercial Construction Loans?

Building your business is an exciting adventure! We are excited to take it with you. Your banker is a true partner through out the construction process and after. We work with you, your contractor and other interested parties, like title companies, to ensure your project is hitting its target from start to finish.

Our local decision makers are there with you every step of the way. They get out of the office and into the field to meet you where your business is booming. Find a NEBAT Business Lender that will best fit your needs!

During Construction

To get your building project off the ground, your Commercial Construction Loan is a line of credit up to a certain dollar amount based on information you have worked through with your contractor and your banker. While your contractor is working on your building or remodeling project, they submit work done to the title company; the title company reviews it and provides a report for the bank.

When Your Business Construction is Complete

It's time to increase productivity and get back to business! After construction, your Construction Line of Credit will transfer to a Term Bank Note, determined by your unique business situation. All commercial loans are different, and a Commercial Construction Loan has a lot of layers to it that elevate the relationship between banker and customer.

Industries That Benefit from Construction Business Loans

National Exchange Bank & Trust partners with all kinds of businesses to help them succeed. We have knowledgeable lenders with years of experience in a number of different industries, including:

• Manufacturing
• Industrial Parks
• Retail Space
• Municipal Buildings
• Health Care
• and more

Frequently Asked Questions

What are the commercial construction loan requirements?

Commercial construction loans require a certain discipline and commitment to the process. The process requires careful coordinate between owner (borrower), general contractor, title company, and the bank. The process begins with a thoroughly planned budget including adequate contingency reserves for unplanned variances which occur during construction. Working with an experienced commercial banker is key to manage the risk and insure a successful outcome. Required documentation may vary but will include financial statements and supporting documentation for collateral.

What are the typical terms of a construction loan?

The terms of a commercial construction loan can vary greatly depending on the project, but generally are a 12-18 month term with a floating or fixed rate, and the bank will advance up to 75% of the project cost. Draws are coordinated via title company to insure payment to key subcontractors / vendors upon receipt of proper documentation and lien waivers. Periodic inspection by the bank and or the title company is a critical component to managing a successful project. Additionally, interest reserves and fees may vary from project to project.

Are there small business construction loans?

The SBA and or USDA can be excellent resources for permanent or longer-term financing. In most cases, the bank will provide construction financing subject to a “take-out” commitment from the SBA / USDA once the project is completed. Working with an experienced, knowledgeable commercial banker can assist in evaluation of the best loan structure, use of certain governmental programs, selection of a qualified general contractor, and coordination with the title company. Construction loans are most common in support of owner-occupied real estate and real estate developers / investors.