Business Construction Loan April 15, 2016
Many of our commercial/business clients chose to purchase a block of land and either build their purpose built business premises , or build investment commercial property .
Construction loans are far more involved than loans to purchase established commercial property , but let Better Choice help you navigate the financing minefield that it can be .
More often than not, initially you will have two loans, i.e. one loan for the land and one loan to construct the commercial property .
On completion of the property, if you desire, the two loans can be consolidated into one loan. During the construction phase, the lender will control the release of funds to the builder. That is, at each stage, (usually 4-5) when the builder requires payment, the invoice will be sent to the bank for payment. The bank will seek the borrowers authorisation before payment.
As the construction loan is drawn down in stages, you, the borrower, only pay interest on what is outstanding.
In the main, construction loans are only available on a variable rate.
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