What Is A Commercial Construction Loan?
A commercial construction loan is used to finance the costs associated with the construction or renovation of a commercial building. The funds from a construction loan can be used to pay for labor and materials for the construction, the purchase and development of land for a new commercial property, or the renovations of existing properties.
With commercial construction loans, IncredibleBank provides funds throughout the construction process to pay for labor, materials, and land development so you don’t have to cover the costs yourself.
How Commercial Construction Loans Work
Commercial construction loans are different from other loans. Other loans are structured so that the borrower receives the full amount of the loan at the outset. Once the loan is received, the borrower begins to pay back the loan through scheduled payments.
With commercial construction loans, on the other hand, borrowers do not receive the full amount of the loan up front. Instead, the borrower works with IncredibleBank to create a payment schedule. This means that partial amounts of the loan are disbursed as the project progresses.
As each milestone is completed, IncredibleBank will typically confirm that the work is completed prior to releasing the next draw. This process continues until all milestones have been completed and the full amount of the loan has been distributed.
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