Constructing a new building or re-developing an existing property to sell for a profit, use for your own needs, or rent out for income, can be a successful financial strategy.
Construction Funding: Property is almost always in demand globally . However, building buildings is not cheap. Large upfront costs to cover land, materials and Laboure will be incurred, and meeting these costs can put a major dent in any business cashflow. Fortunately, there’s a solution to this problem – meet the Construction Loan – a purpose-built financial product that lets you fund the cost of building without demolishing your bank balance.
Construction loans, (also known as development loans), are a type of bridging loan used to cover the costs of building new homes and commercial premises or re-developing existing residential and commercial properties. Construction loans may also be used to buy a plot of land to build on or purchase an existing property for redevelopment.
Building or redeveloping a property can be expensive. You need to pay for land, planning, materials, and labor upfront. These costs must be covered before the property can be sold or start making money. It’s hard to get a regular mortgage for these projects, especially if the property is new or being changed a lot. So, builders and developers often use a construction loan to cover these early costs.
Construction loans are short-term, usually lasting 12 to 18 months, depending on the project. The loan is usually paid back once the building is finished and either sold or refinanced with a regular mortgage. If the loan also covers buying the land, you can typically borrow 50% to 60% of the land’s purchase price. In some cases, you can borrow up to 100% of the construction costs, as long as the total loan amount doesn’t exceed 60% to 75% of the property’s estimated value when finished.
The fees, interest rates, and loan terms can vary based on each case. The loan is usually paid out in stages as the project moves forward. The lender will also put a legal claim on the property to make sure they get paid back.
There are different kinds of construction loan:
Suitable for all commercial and residential projects.
This type of loan only covers the purchase of land or an existing building and the costs to build new or re-develop the existing property. Once the project is complete, the loan must be repaid. This can be done by either selling the property or replacing the construction loan with a traditional commercial or residential mortgage.
Suitable for commercial and residential projects, but mainly used for home construction.
Construction-to-Permanent loans provide funds to buy land or an existing property, plus the costs of building new or re-developing the existing premises. Once the project is complete, the loan is converted to a permanent commercial or residential mortgage. This type of financing may cost less than a construction-only loan, as the borrower only incurs one set of fees at the beginning of the project.
Construction Funding:
Suitable for residential projects.
Owner-Builder loans are for homeowners want to build a custom home themselves and they act as both builder and borrower. The loan can buy land and an existing property, plus cover the costs of construction to build new or re-develop the existing house. Due to the complexity involved with building a home, most lenders will only provide this kind of loan if the borrower is a licensed builder. The loan may be paid back when the project is complete or converted to a traditional residential mortgage.
Suitable for all commercial and residential projects.
Businesses and homeowners seeking to upgrade their property can use a renovation loan to cover costs. Small projects can often be paid for with a personal or business credit card . Larger renovations could be funded by refinancing an existing commercial or residential mortgage, or combination financing, such as a mix of asset-finance, unsecured business loan, and a construction-only loan.
Construction loans can be used to pay for:
If you’re looking for funding for industrial projects Construction Funding a startup, real estate, international construction, or even to renovate your home, start a business, or get a personal loan, Prime Funding brokerage will help to make your goals a reality.
Interest rates vary based on the loan type, your business's financial health, and your creditworthiness. Rates generally range from 3% to 5%. Repayment terms can range from a few months to several years. Specific details will be included in your loan agreement.
Approval times vary, but most applications are processed within 24-48 hours. Once approved, funds can typically be disbursed within 1-2 business days, depending on the type of loan.
Global business loans are financial solutions tailored to support businesses in expanding their global reach, engaging in cross-border trade, or acquiring assets internationally. These loans can be used to fund a variety of activities, including setting up foreign branches, purchasing international property, or financing significant export/import transactions.
The application process is simple and can be completed online. Typically, it involves: Filling out an online application form Providing necessary documentation (e.g.,Id, tax returns, bank statements, business plan, Business Rig documents Once approved, you'll receive your loan offer, and upon acceptance, the funds will be transfer in your account.
Loan amounts vary depending on the type of loan and your business's financial profile. We offer loans ranging from a few thousand dollars to several million dollars. You can apply for the amount you need, and our team will work with you to determine what you qualify for.
