Construction Loan
Short-term financing that funds the ground-up construction or major renovation of a commercial property, typically disbursed in stages as work is completed.
Rather than funding the full amount upfront, a construction loan releases money in draws tied to project milestones, and the borrower generally pays interest only on the amount drawn so far rather than the full committed loan amount.
Once construction is complete, a construction loan is usually paid off by refinancing into a permanent commercial mortgage or a bridge loan, since it isn’t meant to be a long-term financing structure on its own.
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