Getting A Large Construction Loan: What To Know
Posted on: 13 June 2017
The opportunity to construct a large office building or an expansive retail space such as a strip mall can give your small construction company a chance to catapult to a new level of success. However, to complete the job, you might need far more capital than you have on hand. Rather than turn down the project, use these tips for securing the construction loan that you can use to go forward with the commercial job.
Seek Structured Financing Services
Common, everyday lenders like your local bank typically do not offer the amount of money you may need to get your commercial property off the ground. To secure this type of capital, you're going to need to appeal to private investors and groups that specialize in structured financing services. These groups focus on whether your construction company is a good risk rather than existing collateral before they approve your loan.
To get your company to be regarded as a sound investment, it's best that you prepare a comprehensive kit of information so that investors can easily make sense of your business. In your kit you may include documents outlining data such as:
- Current financial holdings
- List of outstanding debts
- Income projections for the completed commercial space
- Expertise and background information for yourself, managers and contractors
Do Some Research
While you might not be a finance professional yourself, it's vital that you don't enter your first meeting with investors without knowing anything about how financing may work. Through your own research and conversations with others in the industry, you should attempt a basic understanding of what terms you may be offered and what kind of interest rates could apply.
Look for Flaws
Even if the kit you've made looks flawless, you know more than anyone that your business is not perfect. Investors will ask you questions to expose all the facts about your company, not just the great things. For that reason, do some reflection and prepare for the questions you know will come.
For example, you might have a small workforce and a number of projects already in construction. Don't try to hide this from prospective lenders; instead, have a list of possible solutions to your problem. This will prove that you're forthcoming and working on any weak spots.
Getting a loan for a large construction project is easier when your attention is focused on the above information. Work with a solid structured financing services company, like Mcdonald Financial Corp, to get the capital you require.
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