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Commercial construction loan lenders provide financing for commercial construction projects. The loans are typically short-term, with repayment terms of one to five years. Commercial construction loan providers may be banks, credit unions, insurance companies, or other private financial institutions.
According to CBRE, the commercial construction industry is expected to grow by 4% in 2022. This growth is driven by strong demand for office, industrial, and retail space in the United States. With this growth comes an expected year-over-year increase of 14.1% in construction costs as material and labor costs also rise. Commercial construction loans offer financing support for these rising costs, allowing developers to break ground on new projects or continue existing ones.
The following is a list of the top commercial construction loan lenders in the United States, based on loan volume:
AVANA Capital is a direct construction, bridge, and SBA 504 lending company that offers flexible financing ranging from $5 million to $25 million. Borrowers need to pay a down payment of only 10% to 20% for construction loans (unlike the typical 30% to 35% from most lenders), depending on the type of property, and pay only the interest for the first two years. After the first two years, the principal amount is then converted to a principal and interest payment spread out over a 20-year to 25-year repayment period.
Eligible property types for a commercial construction loan with AVANA Capital include hospitality, retail, medical offices, assisted living, franchised, industrial or warehouse, and self-storage facilities. The loan proceeds may be used for purchase, property expansion, and renovation.
BuildBuyRefi is a consistent player in most commercial construction loan lenders’ “best” lists because they can provide up to 100% financing and a single loan product that would otherwise take several if obtained through traditional lending firms. They provide OTC construction and renovation loans in 47 states, purchase and refinance loans in all 50 states, and guarantee that the loan is 100% in place before breaking ground.
FMC Lending is a great option if you have bad credit, are self-employed, or have a fluctuating income. With no minimum credit score required and no minimum loan limits, FMC Lending is a great choice for construction loans. Interest rates are variable and depend on the loan program and borrower qualifications, but typically start around 8%. Single loan closing helps make the process simpler and more efficient.
TD Bank is a good option for commercial construction loans because it offers competitive rates, has multiple locations for customer convenience, and features loan programs with low down payments. It’s an attractive choice for buyers who want a reputable bank with a long lending history with walk-in locations and the flexibility to choose between fixed and adjustable rate construction loans. You can also add a construction loan to your existing mortgage. The minimum amount for a construction loan is $100,000.
If you’re looking for a commercial construction loan, U.S. Bank offers competitive rates and a variety of loan products to choose from. You can apply for a conventional loan or USDA loan. The credit requirements for a conventional loan are 620, and 740 for a jumbo loan. U.S. Bank also offers home equity options and government-backed loan products. You can access their interactive lending portal on their website to see rates updated daily.
Commercial Loan Direct offers conventional construction loans for commercial real estate properties from $1 million to $100 million. Term lengths range from 12-36 months for owner occupied or investment properties. The loan collects interest only during construction and the builder must be approved by the lender before construction begins. To get a quick quote, you can visit Commercial Loan Direct’s website.
Contact Commercial Loan Direct
There are a variety of commercial construction loan lenders to choose from, each with its own set of qualifications, rates, and terms. It’s important to compare your options and choose the lender that best meets your needs. You can use this guide to help you narrow down your choices and find the best commercial construction loan lender for your project.