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Specialized financing that moves as fast as your opportunities with our network of private money lenders and hard money specialists.
Breaking ground on a commercial development project—whether it's an office building, retail center, warehouse, or mixed-use property—requires specialized financing that moves as fast as your opportunities. Unlike traditional mortgages for existing properties, ground-up construction demands a flexible financial tool known as a commercial construction loan.
These short-term loans are designed to fund your project from acquisition through completion, covering everything from site work and materials to labor and soft costs. The traditional bank process can be slow and restrictive, but our network of private money lenders and hard money specialists offers the speed and flexibility that today's competitive market demands.
This guide provides a comprehensive overview of commercial construction loans. We'll cover loan structures, draw processes, underwriting criteria, and how to leverage private lending networks for faster approvals. Whether you're an experienced developer or new to commercial construction, this guide will help you secure the financing needed to bring your project to life.
A commercial construction loan is a short-term financing vehicle designed to fund the development of commercial properties. Unlike traditional bank financing, private construction lenders can move quickly, often funding in weeks rather than months. These loans typically run 12-36 months, covering the construction period until you can secure permanent financing or sell the completed project.
The key difference between commercial construction loans and traditional commercial mortgages is the disbursement method and underwriting focus. Instead of a lump sum at closing, the lender releases funds in stages, known as "draws," which correspond to specific, verifiable stages of completion (e.g., foundation laid, framing complete). Before releasing a draw, the lender sends an inspector to the site to confirm the work has been completed to a satisfactory standard. This protects the lender and keeps your carrying costs manageable, as you only pay interest on the funds you've drawn.
Private construction lenders understand that time kills deals. While banks focus on your credit history and financial statements, hard money and private lenders prioritize the project fundamentals: location, market demand, your experience, and the property's "as-completed" or after-repair value (ARV).
| Feature | Traditional Bank Loan | Private Construction Loan |
|---|---|---|
| Purpose | Purchase existing commercial property | Fund ground-up commercial development |
| Disbursement | Lump sum at closing | In stages (draws) as work is completed |
| Loan Term | 5-25 years | 12-24 months |
| Interest Rate | 5-8% | 10-15% |
| Payments | Principal + Interest | Interest-only on drawn funds during construction |
| Collateral | The existing property | The land and future completed value |
Commercial developers have multiple financing options, each suited to different project types and exit strategies. Our network of private money lenders offers flexibility that traditional banks can't match, with loan structures designed for speed and profitability.
The most popular choice for commercial developers who need speed and flexibility. Hard money construction loans are asset-based, short-term financing solutions that can close in days, not months.
Ideal for developers who need to acquire property quickly and begin construction immediately. Bridge loans with construction holdbacks combine acquisition and construction financing in one flexible package.
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In commercial construction, speed and certainty beat low rates every time. While traditional banks take 60-90 days to approve (if they approve at all), opportunities disappear in days. The best sites get snapped up, contractors move to other projects, and your competition closes first.
Clear House Lending connects you directly with private money lenders and hard money specialists who understand commercial development. Our network includes lenders who can fund projects banks won't touch—from ground-up construction to major renovations.
What our private construction lending network delivers:
Private commercial construction lenders evaluate deals differently than banks. While banks obsess over your personal finances, private lenders focus on what really matters: the deal quality, location, and your ability to execute.
Private lenders make decisions based on the project's viability, not your credit score. Here's what they evaluate:
While private lenders are asset-focused, your experience still matters. They want to know you can execute the plan.
Private lenders need enough information to understand your project, but they won't drown you in paperwork like banks do. Be prepared with:
Commercial development is a high-stakes game where speed and certainty of execution are paramount. Waiting on traditional bank financing means losing deals and falling behind your competition. A commercial construction loan from a private lender is the tool that allows savvy developers to move quickly and capitalize on market opportunities.
You don't have to navigate the private lending market alone. At Clear House Lending, we connect you with a network of vetted private lenders who can fund your deals in days, not months. They provide the speed, flexibility, and creative structuring you need to build your portfolio with confidence.
Ready to break ground on your next project? Connect with a Commercial Construction Loan Specialist to get funded today!
Yes. While experience is a plus, private lenders focus on the deal's quality. A strong project in a great location with a solid proforma can get funded even with limited experience. You may need to bring in a more experienced GC or have a higher equity stake (30-40%), but a lack of experience is not an automatic "no."
This is why most lenders require a 10-15% contingency reserve in your budget. This fund is used to cover unexpected costs. If overruns exceed your contingency, you'll typically need to cover the difference with your own cash to keep the project moving and continue receiving draws.
Absolutely. Most private construction loans are structured to include the land acquisition cost. If you already own the land, you can often use its equity as part of your required down payment, reducing your cash-to-close requirement.
Hard money and private construction loans typically have interest rates between 10% and 15%, plus 2-4 points in origination fees. While higher than bank rates, the speed and flexibility they provide often result in a higher return on investment for the project.
The lender will order a third-party appraisal to determine the "as-completed" value or after-repair value (ARV) of the project. This is based on your plans, budget, and comparable sales or leases for similar completed properties in the area. Your loan amount is based on this future value.
Access and leverage. Finding the right private lender for your specific project is difficult and time-consuming. Our network gives you immediate access to dozens of pre-screened, vetted commercial construction lenders who are compelled to compete for your business. This competition drives down rates and fees, ensuring you get the best possible terms without having to shop your deal all over town.
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