New construction or improvements are often the next steps for business growth and expansion. Of course, renovating, additions, or building new comes at a high price many companies can't afford upfront. At this point, it's time to consider taking out a commercial construction loan.
Regardless of the type of financing you require, Miller Architects & Builders is here to assist you. It's important for you to understand the mechanics behind commercial construction loans, as in any loan.
Let’s explore a few of your options to finance a commercial construction project!
Commercial Construction Company Financing
When considering a construction project, the first thing to get in order is your finances. If your finances are in order, it makes the process easier and faster, and you’ll know upfront what you can afford.
This process should start before or as soon as you start talking to your construction management company. The bank process can take some time, and your building can’t begin until you have all the financing paperwork in order and signed.
Client Financing Methods
Most companies embarking on an addition, renovation, or new build will have to finance their project somehow, and that usually means taking out a construction loan. What kind, though, depends on many factors; the size of the loan, financial history, other financial resources, etc.
Commercial Construction Loans
A different beast from many other types of loans, these don’t give you a lump sum of cash up-front. Rather, you collaborate with a financial institution on when you’ll receive numerous smaller payments. Usually, this is when the build reaches certain progress points.
According to Merchant Maverick, this is considered a “high-risk” loan, and you’ll want to make sure that you have your credit in good order before applying for one.
Conventional Business Loans
These loans offer lump-sum payment withdrawal. Like commercial construction loans, they require a good credit score, as the risk to the bank is large.
According to Bankrate, this type of loan is best for businesses with a longstanding history, as they can take advantage of low- interest rates.
Useful for the small business just getting started, this loan structure allows banks a lesser degree of risk when working with a small business.
SBA loans boast good interest rates and low initial down payments but only are an option if you meet the small size requirements.
Miller Architects & Builders: Client-Focused Construction Project Management Pros
When you need a commercial construction management company that’s got your back, you can trust our long history and our track record of satisfied clientele. Give our Saint Cloud office a call today at 320-251-4109.