How to Prepare a Financial Package for a Commercial Construction Loan

Winston Rowe and Associates

Preparing a financial package for a commercial construction loan requires careful organization and presentation of your financial information. Lenders typically require detailed documentation to assess the viability of the project and evaluate the borrower’s ability to repay the loan. Here are the key steps to prepare a comprehensive financial package:

1. Project Summary: Begin by creating a concise summary of your commercial construction project, including its scope, location, timeline, and objectives. Provide an overview of the project’s financials, such as the total cost, expected revenue, and projected profits.
2. Business Plan: Develop a comprehensive business plan that outlines your company’s background, experience, and expertise in commercial construction. Include details about your team’s qualifications, past projects, and any unique selling points that set your business apart. The business plan should also highlight your marketing strategy, target market, and competitive analysis.
3. Financial Statements: Prepare detailed financial statements for your business, including income statements, balance sheets, and cash flow statements. These statements should cover at least the last three years and be audited or reviewed by a certified public accountant (CPA). Include notes that explain any significant fluctuations or extraordinary items.
4. Construction Budget: Create a detailed construction budget that outlines all the costs associated with the project. Include line items for land acquisition, permits and fees, design and engineering, materials, labor, equipment, and contingency funds. Use accurate cost estimates from contractors, suppliers, and other industry professionals.
5. Pro Forma Financials: Develop pro forma financial statements to project the future financial performance of the completed project. Include a pro forma income statement, balance sheet, and cash flow statement. These projections should be based on realistic assumptions, including anticipated revenues, expenses, and market conditions.
6. Construction Timeline: Present a comprehensive construction timeline that outlines the various phases of the project, from site preparation to completion. Include estimated start and end dates for each phase, as well as key milestones along the way. This timeline should demonstrate a realistic and well-planned construction schedule.
7. Collateral Documentation: Identify and provide documentation for any collateral that will secure the loan, such as the property or other assets. Include property appraisals, title deeds, surveys, and insurance documentation. These documents help lenders assess the value and marketability of the collateral.
8. Personal Financial Statements: Prepare personal financial statements for each principal owner or guarantor of the loan. Include personal balance sheets, income statements, and tax returns for the past three years. Lenders often consider the personal financial strength of the borrowers when evaluating the loan application.
9. Project Feasibility Analysis: Conduct a thorough feasibility analysis that demonstrates the viability of the commercial construction project. Include market research, demand analysis, and economic forecasts for the target market. Show that there is a market need for the project and that it is financially feasible.
10. Executive Summary: Finally, compile an executive summary that provides an overview of the entire financial package. This summary should highlight the key points of your business plan, financial statements, construction budget, and feasibility analysis. It should be concise, compelling, and easy to understand.

Rising Interest Rates and Commercial Real Estate

Investors are keeping a sharp eye on interest rates as they are a major factor to leverage returns. Rates have rapidly climbed over the last few months, and it is expected this trend will continue through 2022 and well into 2023. At the start of the year, interest rates for investment properties were between 3.5% and 4%. In four short months, we are seeing rates inching closer to 8%.

What does this mean for real estate?

Increasing interest rates make borrowing more expensive, therefore impacting investors’ desired return. Investors are forced to offset the higher cost of financing with a lower purchase price on real estate. As rates climb, cap rates usually follow, which puts downward pressure on pricing. Unlike the 10-year treasury and interest rates, cap rates do not see daily volatility. There is usually a lag between the time it takes the market to see cap rates increase from interest rate hikes alone.

The aggressive interest-rate increases are a direct move to combat inflation, the highest we’ve seen in four decades. The general rule of thumb is that higher interest rates are usually a response to higher inflation, which could have a positive impact on real estate income growth. Even though rates are trending upwards, which impacts what investors can pay, they will be focused on pushing rents to keep valuations high.

Economists expect rates to continue rising over the next 1-2 years, potentially reaching the 6% – 8% range. This could have a drastic impact on cap rates. Luckily, with low vacancy and little new construction in commercial real estate, it doesn’t create the same problem we saw during the Great Recession with over-supply. Investors will be more focused on increasing rents than being cap rate driven for values, which caused cap rate compression over the last few years.

An increase in values over the past twelve months have forced lenders to tighten their underwriting — the loan-to-values (LTV — amount of a loan compared to appraised value) we have seen in the past no longer worked! Currently we are seeing 55% – 65% LTV rather than the 65% – 75% during the last few years. Lenders are being more cautious with rising rates, cap rate compression, increased values, and the changing environment we face with headwinds in the debt markets.

Increasing interest rates make borrowing more expensive, therefore impacting investors’ desired return.

Positive vs negative leverage

Sellers can anticipate investors showing more caution and patience if they need debt until 2022 unfolds and the impact on values is revealed. It becomes difficult to use debt today if it creates negative leverage, meaning debt is at a cost that eats into cash flow, reducing the cash-on-cash return compared to an all cash return. Typically, debt is used to maximize the return, which means investors need positive leverage. That doesn’t happen when you are buying at a 5% cap rate and borrowing at a 4.75% interest rate. To determine positive or negative leverage, you divide your annual loan payment by your loan amount to generate a loan constant. Based on the loan constant, you will know the minimum cap rate needed to generate positive leverage.

For example, if you bought a $5,000,000 property with 60% LTV, your loan would be $3,250,000. If you had a 30-year amortization with a 4% interest rate your annual debt service is $186,192 [$186,192 debt service/$3,250,000 loan amount = 5.73% loan constant]. This means you must buy a property at a higher cap rate than 5.73% to get positive leverage.

A 5.50% cap rate on $5,000,000 generates $275,000 of net income, less the $186,192 debt service, would leave you with $88,808 in cash flow. Take that $88,808 and divide it by your down payment of $1,750,000 and you have a 5.07% cash-on-cash return – which is less than the 5.50% cap rate, meaning that loan generated negative leverage.

On the other hand, a 6.00% cap rate on a $5,000,000 property would generate $300,000 of net income, less the $186,192 of debt service and you have $113,808 in cash flow. Divide that by the $1,750,000 down payment and you have a 6.50% cash-on-cash return – which is more than the 6.00% cap rate, meaning that loan generated positive leverage.

This concept is important to understand because it is what drives buyers to pay lower prices and have higher cap rates – making debt work to get positive leverage. Otherwise, bringing debt into a deal may not be advantageous to the borrower at current pricing and interest rates.

As we move forward in 2022, we may not see the movement in values right away, but sellers and buyers will soon enough find themselves at a crossroad of having to understand debt market pressure of increased interest rates and what buyers can (and will) actually pay. Sellers still find themselves in a great position to sell, as the amount of capital in the market is aggressively looking for real estate to hedge inflation. Today’s environment of changing rates and inflation causes uncertainty in stocks, cash, and other alternatives, whereas real estate is viewed as a much safer investment alternative.

How Do Commercial Construction Loans Work

Winston Rowe and Associates Commercial Construction Loans With No Upfront Fees

What are construction loans?

A construction loan is a type of bank-issued short-term financing, created for the specific purpose of financing a new home or other real estate project. A traditional mortgage, also called a permanent loan, will help you buy an existing house. However, if you need to build a new house from the ground up, especially if you also need to purchase the raw land, that’s where a construction loan can help.

How do construction loans work?

The loan can be applied for by anyone who is investing their time and money in construction or related expenses. An individual homeowner, a contractor, or a small business owner can use construction loans to finance their construction project. If you already own the land, the equity that you have in that property can be used as your down payment for your construction loan.

Many borrowers ask how a construction loan turns into a mortgage. After the house is complete and the term of the loan ends (usually only one year), the borrower can refinance the construction loan into a permanent mortgage. Alternatively, the borrower can apply for a new loan (often called and “end loan”) to pay off the construction loan.

Does the borrower make monthly payments on a construction loan? Yes, however interest payments on this loan might only be required while the construction project is still underway. Unlike a lump sum loan, construction loans are similar to a line of credit, so interest is based only on the actual amount you borrow to complete each portion of a project rather than all at once. Some construction loans may require the balance to be paid off entirely by the time the project is complete.

More than just for the actual building, a construction loan can also be used to pay for equipment used in construction, building materials, or for hiring employees.

Here are some uses and things to know about construction loans:

New construction: If you are an individual or small business owner who is looking for funding to build a new home for yourself or a client, then you can apply for a short-term construction loan. This type of loan can be used to pay for the construction of new buildings. Construction loans have high-interest rates owing to the risk involved.

Builders or homeowners who want to build custom homes generally look to a construction loan. After completing the project, you can refinance the loan into a mortgage, or you can repay it by taking a new loan from another financial institution.

Expect a big down payment: Construction loans generally require a large down payment of around 20-25% of the total cost of the project, usually the cost of construction and mortgage.

Thorough application process: When you apply for a construction loan, you’ll be asked to provide the details of your construction project, including like the total amount of funding required, details about the builder, a detailed project timeline, the floor plans or construction drawings, the cost of materials, and the cost of labor.. (We’ll talk about applying for a construction loan in more detail later.)

Look out for paperwork: Until recently, it was hard to find lenders offering construction loans online. If you know you want to apply for a construction loan, you might find it easiest to visit your local bank or regional credit unions and ask for information in person. These institutes will be aware of the local property and construction market, and should be able to help you create a plan for your application.

Types of construction loans

Construction Mortgage Loans: This is a loan you can use to finance the purchase of land, or construction of a home on land you already own. These loans are usually structured so that the lender pays a percentage of the completion costs and you, the builder or developer, pay the rest.

During construction, the lender will release your funds in a series of payments, called “draws.” Typically, the lender will require an inspection between draws to check that the project is proceeding as planned. As the borrower, you are responsible for paying interest on the amount of funds you use.

This is different from a term loan, where you get a lump sum payment at once, and then pay back interest on the whole amount. Once your construction is complete and your interest paid, you’re responsible for repaying the entire loan amount by the due date. Generally, construction loans have short terms because they reflect the amount of time it would take to build the project; a year-long term is common.

Construction-to-Permanent Loans: Also called the CP loan, construction-to-permanent loans are another option for financing the building of a new home. CP loans offer some extra convenience to borrowers by combining two types of loans in a single process.

During construction, if you have a construction-to-permanent loan, you only pay interest on the outstanding balance, at an adjustable rate determined by the lender and pegged to the prime rate. The prime rate is a widely-used benchmark based on the federal funds rate, which is set by the Federal Reserve, meaning that if the Fed raises rates, then the interest rate on your construction-to-permanent loan will rise, too.

When the construction phase is over, the C2P loan converts into a standard 15- or 30 year mortgage where you pay principal and interest.

An advantage of construction-to-permanent loans for small business owners and homeowners is that instead of having to get a loan for the construction phase and then a second for financing the finished project, you can get two loans at once. In this scenario, you only close once and pay one set of closing costs.

Commercial Construction Loans: If you’re thinking bigger and planning to construct a multi-family home or apartment building, high-rise, multi-unit retail center, commercial office building, or other type of larger project, then you should probably be looking for a commercial construction loan.

Lenders for modern commercial construction loans for apartments and similar big projects are extremely risk-avoidant, and will expect a developer to shoulder most of the risk by covering up to 90% of the cost of the project. If you’re involved with this type of commercial project, you’ll need to be prepared with a lot of cash on hand to fund the construction yourself.

Why get a construction loan?

Purchase Equipment and Materials: You can use a construction loan to buy material and equipment that will be used in the construction of the new home.

Expanding a Company’s Facility: If you are a small business owner with a physical location and you need to build a new office or remodel an existing one, then you can use construction loans to finance your construction project.

Hiring and Training Employees: You can use the funds from a construction loan to hire new employees for construction purposes. You can also finance education and training costs for those employees with your construction loan.

Overcoming Damage or Disaster Expenses: If your office or commercial property is damaged by unforeseen circumstances like an earthquake or other disaster, you can use construction loans to make necessary repairs.

How can you get a construction loan?

Is it harder to qualify for a construction loan? Yes, construction loans are harder to get than a typical mortgage. Most lenders consider construction loans risky (because there is no asset to secure the loan), so you’ll face some stiff requirements if you decide to apply. Here’s what many lenders require for a construction loan:

Down payment: To get a construction loan, you’ll need to make a down payment of 20% or more of the cost of the total project. This means that you will need to be prepared to start the project with your own funds or assets before a lender will agree to loan more. If you already own the land, for example, it’s likely that you will be able to use that toward the down payment amount.

Talk to your lender about this. The particular amount of your down payment will depend on the cost of your project, the land, and what you plan to do with the funds. Lenders require high down payments as a way of making sure you’re invested in the project and won’t vanish if things go wrong during construction.

Strong personal credit: Anytime you apply for a construction loan, you’ll need to provide the lender with your personal credit history–even if you are applying as a small business. The lender will almost definitely want to see your personal FICO score and your business credit history, too.

Financial documents: Typically, a prospective lender will analyze your current and past debt and payment history, as well as any other loans or liens you may have on your property. Whether this loan is for your own home, or for a small business construction project, you’ll be asked to provide financial statements, tax returns, and proof of other assets.

Good reputation: Whether you are the builder, or you are working with a builder, know that the lender will scrutinize the builder’s reputation. Any public information is fair game for making this judgement call: vendor and subcontractor reviews, online reviews, and previous work history.

If you are working with a builder, they should not hesitate to provide evidence of their good reputation, along with the detailed project plans and cost estimates you’ll also need. If you need help finding a qualified builder, check out one of the many National Association of Home Builders chapters closest to you. A trusted local builder with a solid history of successfully completed projects will have an easier time getting a vote of approval from a financial institution in the form of a construction loan.

Specific plans: To qualify for a construction loan, you must have specific and detailed building plans, construction contracts, and cost estimates ready.

Appraisal: It’s challenging to appraise something that does not exist yet! Of course, there are experts who do just that every day. Construction lenders work with appraisers to analyze your project when you apply for a loan. They review the specifications of your construction project and compare it with other existing constructions of similar specifications. They then draw conclusions regarding the possible worth of the construction in the future.

It is very important to get a good appraisal to improve your chances of getting a construction loan approved. You can get an independent appraisal if you want, but your lender will most likely insist on conducting their own.

How do you qualify for an FHA construction loan?

If you have less-than-perfect credit, you may qualify for a construction loan backed by the Federal Housing Administration. FHA construction loans have lower qualification minimums than most banks. As of October, 2020, these FHA requirements were: FICO® score at least 580 = 3.5% down payment FICO® score between 500 and 579 = 10% down payment MIP (Mortgage Insurance Premium ) is required Debt-to-Income Ratio < 43% The home must be the borrower’s primary residence Steady income and proof of employment

First steps toward construction financing

Before making decisions about your potential construction loan, we recommend that you consider a wide range of options. Banks, online lenders, brokers, and subcontractors can each help you through the difficult and stressful process of completing your construction project. On the other hand, if you choose the wrong partners, they can add delays and complexity.

Here are a few more recommendations for getting started:

Shop Around for the Right Lender: You can look around for a lender that will offer all the options that you need. Some lenders will not provide construction loans while some lenders will provide loans with limited options that you do not need. Check out your local banks and credit unions to learn what type of construction financing they offer, and which options are available to you.

A broker is a professional and expert in construction loans, and an experienced one can save you a lot of hassle. They will understand your requirements, explain to you the best options that you have given your budget, and then shop around for the right lender. They may be able to get you better rates than you can negotiate yourself. Brokers understand the financial side of the construction loan as well as the construction side and both their limitations.

Confirm the Lender’s Experience: This might sound obvious, but make sure to choose a lender with experience in construction financing. If their past experience isn’t clear, you can ask them about past construction projects they’ve financed. You can also ask for references of other developers they have helped.

Tap your network and your local community: If you’re looking for help with a construction loan, look locally. Your personal network is always a good place to look for trustworthy recommendations. If you have a good relationship with a local banker or financial institution, that is also a great place to start.

Which bank is the best for a construction loan?

Your choice of the best bank depends on a number of factors, including your borrower profile, who offers a construction loan in the state where you live, your credit rating, and how much money you have to put down on a construction loan.

Winston Rowe and Associates Commercial Construction Lending With No Upfront Fees.

Commercial Construction Loans: The Ultimate Guide

No Upfront Fee Commercial Construction Loans

Winston Rowe & Associates

You’ve reached the point in your business when it’s time to expand. Maybe you’re renting your office space and you’ve decided that it’s time to build your own office building.

Perhaps you’ve outgrown your property and you want to add on to your existing space. Your scenario could be completely different: you’re a new business just getting off the ground and you want to build your property from the ground up.

No matter what the circumstances, many businesses face a situation where real estate construction or improvements are the next steps for business expansion. Of course, this expansion comes at a very high cost – a cost that many businesses can’t afford to pay up front. This is when it’s time to consider taking out a commercial construction loan.

As with any other type of financing, it’s important to understand the mechanics behind a commercial construction loan.

Read on to learn more about commercial loans, when you should consider applying, and what to expect throughout the application process.

What Is A Commercial Construction Loan?

A commercial construction loan is a type of loan that 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 of a new property, the purchase and development of land for a new commercial property, or the renovations of existing properties.

Why Take Out A Commercial Construction Loan?

Business owners who plan to purchase existing commercial properties can get a loan known as a commercial mortgage. However, if you plan to renovate your existing space or construct a new building from the ground up, you’ll need to apply for a commercial construction loan.

New construction and renovations can be expensive — think hundreds of thousands or even millions of dollars. Most growing businesses don’t have this type of cash on hand, so instead, they turn to a commercial construction loan. With commercial construction loans, lenders provide funds throughout the construction process to pay for labor, materials, and land development so you don’t have to cover the costs yourself.

How do you finance a large construction project?

Commercial construction loans are different from other loans. Most loans are structured so that the borrower receives the full amount of the loan as one lump sum. Once the loan is received, the borrower begins to pay back the loan through scheduled payments over a set period of time. Commercial mortgages, for example, often have a monthly repayment schedule over 10 years or longer.

With commercial construction loans, the full amount of the loan is not received up front. Instead, the borrower will work with the lender to create a draw schedule. This means that partial amounts of the loan will be released as the project hits new milestones. For example, the first draw will be for the clearing and development of land. The next draw may then occur when the foundation is poured. Another draw will be released when the building has been framed, and so on.

As each milestone is completed, a lender will typically require an inspector to confirm that the work is completed before releasing the next draw. This will continue until all milestones have been completed and the full amount of the loan has been distributed.

With a commercial construction loan, you will only pay interest on the portion of the loan proceeds that have been received. If the total cost of your new construction is $500,000 but the lender has released just $100,000, you will pay interest on $100,000.

Typically, a commercial construction loan is structured so that the borrower pays only the interest until the loan has been fully disbursed. Borrowers can then pay off the principle in one lump sum at the end of the construction project.

But once the project is done and the full amount of the loan is due, what does a borrower do next? Instead of having to make one large payment, the borrower now can receive a commercial mortgage. The property will serve as collateral, and the borrower will use the funds from the commercial mortgage to pay back the commercial construction loan. With the new mortgage, the lender will now be locked into more affordable monthly payments over a longer period of time.

Other commercial construction loans like the Small Business Administration CDC/504 loan provides more long-term options so an additional loan following the completion of the project will not be needed.

What is the current rate for commercial construction loans?

For commercial construction loans, borrowers should expect to pay interest rates between 4% and 12%. Borrowers with the best credit scores will receive the lowest interest rates. The type of lender you work with is also a factor. A commercial construction loan from a bank will typically have the lowest interest rate, while hard money lenders charge more interest for their loans.

Fees

There are several fees that may be associated with taking out a commercial construction loan. The fee types and amounts vary by lender. Some fees you may have to pay for this type of loan include:

Guarantee Fees

Processing Fees

Documentation Fees

Project review Fees

Fund control Fees

Down Payment

Because a commercial construction loan is a high-risk loan, a down payment is required. By paying a down payment, the borrower takes some of the risk off of the lender. Typically, down payment requirements are 10% to 30% of the total project cost. Rarely will a lender fund 100% of the costs of a commercial construction project.

Conventional lenders use a calculation known as loan-to-cost for commercial construction loans. The loan-to-cost ratio is calculated by dividing the total amount of the loan requested by the total project cost. Let’s say, for example, a business is requesting a loan of $190,000 for a project with a total cost of $200,000. The loan-to-cost in this example would be 95%.

Though requirements vary by lender, most require a loan-to-cost of 80% to 85%. For the example above, the lender would loan $160,000 at 80% and $170,000 at 85%.

If this occurs, what does the borrower do? While they may be forced to come up with the remaining costs out-of-pocket, there is another option — mezzanine loans — which we’ll discuss a little later.

Borrower Requirements: How Commercial Lenders Evaluate Eligibility

Not all construction projects are eligible for a commercial construction loan. There are several factors that a lender will consider in order to determine eligibility.

One of the first things that a lender will look at is your credit score. Because these are high-risk loans, lenders want to work with low-risk borrowers with high credit scores. Though credit requirements vary by lender, you should have a credit score at least in the high 600s before applying to qualify for loans such as the SBA CDC/504 loan. Other lenders may require a minimum score in the 700s. Business credit scores will also be evaluated.

The lender will also consider your debt-to-income ratio, also known as DTI. This ratio shows the relationship between the income and the debt of your business on a monthly basis. Typically, lenders look for a debt to income ratio of 43% or less, although some lenders may have stricter requirements. The lower your DTI, the higher your chances for approval. To calculate your DTI, use the following formula:

Total Monthly Debt Payments / Gross Monthly Income = DTI

Lenders will also consider your debt service coverage ratio, or DSCR. This shows the relationship between the income and debt of your business on an annual basis. To calculate for yourself, use the following formula:

Net Operating Income / Current Annual Debt Obligations = DSCR

The DSCR is a bit different from DTI because you want this number to be higher. This shows that your business is bringing in enough income to cover new debts. Most lenders look for a DSCR of 1.25 or higher, but again, requirements vary by lender. Learn more about calculating your DSCR.

The lender will also look at your industry experience and your current business financials to determine if you qualify for a loan. You’ll need to submit detailed construction plans for approval before a loan can be issued. In some cases, the plans may need to be altered based on any risks spotted by the lender, so your ability to be flexible in your plans is key.

Types Of Commercial Construction Loans

Now that you know more about the commercial construction loan process, it’s time to explore the different types of loans available.

SBA CDC/504 Loan Program

The Small Business Administration (SBA) CDC/504 loan is one of the most popular commercial construction loans. This is because these loans come with low down payments, competitive interest rates, and credit score requirements in the high 600s.

Borrowing Amount

No maximum, but the SBA will only fund up to $5 million

Term Lengths

10 or 20 years

Interest Rates

Fixed rate based on US Treasury rates

Borrowing Fees

CDC servicing fee, CSA fee, guarantee fee, third party fees (however, most of these fees are rolled into the interest rate or cost of the loan)

Possible prepayment penalty

Personal Guarantee

Guarantee required from anybody who owns at least 20% of the business

Collateral

Collateral required; usually the real estate/equipment financed

Down Payment

10% – 30%

With this loan, an SBA-approved Certified Development Company will fund 40% of the costs to renovate existing facilities, build new facilities, or purchase/improve land. Up to $5 million is available for borrowers.

Another lender will need to provide 50% of the project costs, while the borrower will be responsible for the remaining 10%. In some cases, borrowers may be required to pay 20%. Repayment terms are available up to 20 years, and interest rates are based on the market rates of U.S. Treasury issues.

SBA 7(a) Loan Program

The SBA also has the 7(a) program, which can be used for the purchase or construction of commercial real estate.

Through this program, borrowers can receive up to $5 million with repayment terms up to 25 years. Interest rates are based on the prime rate plus a maximum of 2.75%. To qualify, borrowers should have a credit score in the high 600s and a down payment of 10% to 20%.

Here are the base rates and markups for a 7(a) loan from the SBA:

Loan Amount      Less Than Seven Years    More Than 7 Years

Up to $25,000

Base rate + 4.25%

Base rate + 4.75%

$25,000-$50,000

Base rate + 3.25%

Base rate + 3.75%

$50,000 or More

Base rate + 2.25%

Base rate + 2.75%

Bank Loans

A traditional commercial construction loan from a bank is another option for business owners. Rates, repayment terms, and down payment requirements vary. Generally, a minimum down payment of 10% is required, maximum repayment terms of 25 years are standard, and fixed and variable rates are available.

You can start your lender search by talking to your current financial institution about your financing needs. See our post on the best bank loans for small business if you’re interested in specific recommendations.

Mezzanine Loans

Earlier in this post, we discussed loan-to-cost ratios. When a loan-to-cost ratio is lower and the borrower needs to come up with additional money, a mezzanine loan may be an option. This type of loan is secured with stock. If the borrower defaults, the lender can convert to an equity stake. With a mezzanine loan, the borrower has more leverage and can achieve a loan-to-cost ratio of up to 95%.

Where To Find Commercial Construction Loans

You know about the types of loans available to you, so where do you find a lender? This all depends on the type of loan you’re seeking.

An SBA-approved intermediary lender (which includes banks, credit unions, and private lenders) distributes 7(a) loans. For CDC/504 loans, an SBA-approved non-profit CDC provides this funding, although you’ll also have to find another lender to finance 50% of your project costs.

Banks and credit unions provide many commercial construction loan options, including SBA loans, traditional loans, and mezzanine loans.

Finally, commercial construction loans can be obtained through hard money lenders. These are private money lenders that provide short-term funding options for commercial construction projects. While there are a few benefits to working with these lenders, including minimal upfront costs and faster funding, these loans typically come with higher interest rates and fees than options from other lenders.

What is the best place for a commercial construction loan?

Winston Rowe and Associates can find you a lender for your commercial construction loan, the next step is to begin the application process.

Contact them at processing@winstonrowe.com or call 248-246-2243.

During this process, the lender will evaluate your personal and business financials, your credit score, and other factors that will determine both whether you’re approved and what your interest rates and terms will be.

Because construction loans are considered high-risk, you will need to provide the lender with a detailed business plan. This should include an overview of what your business does, its financials to date, details about your current operations, and future projections.

You will also need to provide your lender with details about the project. This includes a complete plan with specs and designs. An expected project cost, including estimates for contractors, materials, and other expenses, must be provided with your application.

Personal and business financial documents will also need to be submitted during the application process. These include, but are not limited to, personal and business tax returns, profit and loss statements, balance sheets, bank statements, income statements, and debt schedules showing current debt obligations. Documentation requirements will vary by lender.

The lender will pull your credit score during the process. Remember, lenders are looking for scores in the high 600s. With some lenders, negative items such as bankruptcies, foreclosures, and past defaults on loans may automatically disqualify you from receiving a loan. For negative items on your credit report, an explanation to the lender may be required.

Because this is such a high-risk loan product, lenders will typically take at least a minimum of several weeks to go over your information. During this time, more documentation may be required or your lender may have questions, so make sure to make yourself available to expedite the process.

Once the lender underwrites and approves your loan, you’ll move into the closing process. This entails going over the loan agreement, which will include all dates and milestones throughout the process. Once all paperwork has been signed and the closing process is complete, you’ll be ready to begin the expansion of your business.

Final Thoughts

It’s always exciting to reach a point in your business when it’s time to expand, but getting the financing you need can be a challenge. If your future plans include constructing new facilities or upgrading your current building, getting a commercial construction loan doesn’t have to be stressful.

If you understand the types of loans and requirements and do some prep work ahead of time, you’ll be able to approach your lender with confidence and get through the lending process with ease.

How Commercial Construction Loans Work and How to Get A Loan

Commercial Construction Loans

Securing a commercial construction loan for various types of commercial real estate can be a difficult process to navigate. This post will shed some light on commercial construction loans and demystify the lending process.

Commercial Construction Loans and Lenders

The construction loan process begins when a developer submits a loan request with a lender. Construction or development lenders are almost always local community and regional banks.

Historically this was due to bank regulation that restricted trade areas for lending. More recently, life insurance companies, national banks, and other specialty finance companies have also started making construction loans.

However, community and regional banks still provide the majority of construction financing, since they have a much better understanding of local market conditions and the reputation of real estate developers than larger out of area banks.

There are two normally two loans required to finance a real estate development project, although sometimes these two loans will also be combined into one:

• Short term financing. This stage of financing funds the construction and lease up phase of the project.
• Long term permanent financing. After a project achieves “stabilization” and leases up to the market level of occupancy, the construction loan is “taken out” by longer term financing.

When a bank combines these two loans into one it’s usually in the form of a construction and mini-perm loan. The mini-perm is financing that takes out the construction loan, but is shorter in duration than traditional permanent financing.

The purpose of the mini-perm is to pay off the construction loan and provide the project with an operating history prior to refinancing in the perm market.

Commercial Construction Loan Underwriting

After the initial loan request is submitted, the bank typically goes through a quick internal go/no-go decision process.

If the project is given the go-ahead by the bank’s senior lender, the lender will sometimes issue a term sheet which outlines the terms and conditions of the proposed loan, provided all of the information presented is accurate and reasonable.

Once the non-binding term sheet has been reviewed, negotiated, and accepted, the lender will move forward with a full underwriting and approval of the proposed loan.

Underwriting

During the underwriting process the lender will evaluate the proposed project’s proforma, the details of the construction budget, the local market conditions, the development team and financial capacity of the guarantors, and in general address any other risks inherent in the loan request.

Typical documents required in the underwriting process include borrower/guarantor tax returns, financial statements, a schedule of real estate owned and contingent liabilities for the guarantor(s), the proposed project’s proforma, construction loan sources and uses, cost estimates, full project plans, engineering specifications, and in general, any other documents that can support the loan request.

From an underwriting standpoint, one of the most notable differences between a commercial construction loan and an investment real estate loan is that with a construction loan there is no operating history to underwrite.

The economics of the project, and thus the valuation of the property, is based solely on the real estate proforma.  The credit approval process is similar to other commercial loans, but because of the additional risks inherent in construction loans, further consideration is given to the development team and general contractor, as well as the prevailing market conditions.

Loan Approval

Once the commercial construction loan is approved, the bank will issue a binding commitment letter to the borrower. The commitment letter is similar to the term sheet, but contains much more detail about the terms of the loan. Additionally, the commitment letter is a legally-binding contract whereas the term sheet is non-binding.

Commercial Construction Loan Closing and Beyond

Upon completion of the loan underwriting and approval, a loan then moves into the closing process, which can take on a life of its own. Commercial construction loan closings are complex and involve an overwhelming quantity of documentation and procedural nuances.

Typically, the closing is handled by the lender’s attorney, the borrower, and the borrower’s attorney.  A loan closing checklist is also normally issued to the developer along with the commitment letter, which outlines in detail what needs to be completed before the loan can close and funding can begin.

The Closed Loan

After a loan closes, the loan mechanics are primarily the responsibility of the loan administration department within a bank. The loan administer (sometimes just called the loan admin), will fund the loan according to the internal policies and procedures of the bank. Commercial construction loans are typically funded partially at closing to cover previously paid soft and hard costs. After the initial partial funding, loan proceeds are disbursed monthly based on draw requests for costs incurred. These costs are submitted by the developer and verified by the lender.

Commercial construction loans can quickly become complex and difficult to secure. But understanding how construction loans work and how commercial developments are evaluated by lenders can help demystify the funding process.

Free Business And Real Estate Investing eBooks

Contact Winston Rowe and Associates

Welcome to Winston Rowe and Associates knowledge blog, scroll down to the right for posts about commercial real estate.

This is a list of free books about real estate investing, commercial real estate financing and business strategy.

We’re always on the lookout for great free books so bookmark this blog and check back for monthly updates.

These links are not affiliate marketing links, just publications that we feel may add value to people and businesses.

Commercial Real Estate Finance

The eBook Commercial Real Estate Finance, by Winston Rowe & Associates discusses the fundamentals of the different types of commercial property, the various options that are included with properties and the capabilities that you will have as a commercial property investor.

Real Estate Investing Articles

This is a link to 1226 real estate investing articles written by industry veteran’s.

25 Productivity Tips for Successful Business Owners

Productivity is critical to your success at work. Business owners, managers and executives all want to get the most from their employees. If you’re not performing as efficiently or effectively as others, your long-term job prospects could be in trouble.

Real Estate Investing: How to Find Cash Buyers and Motivated Sellers

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Real Estate – Breaking Bad How to Flip Decaying Real Estate Properties for Profit

Tired of working 9 to 5? You should think of making money with real estate! Yes, the effort is well worth it! You just have to ditch the misconceptions and embark with all the passion you have in store for this amazing trip of rehabbing old houses and giving them a new look and a new owner.  Your reward? A nice profit!

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Real Estate Secrets Exposed

This FREE e-Book sheds some light on the often mysterious and sometimes daunting world of real estate.

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Make Money Through Real Estate Renovations

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Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders

Download this FREE e-Book, and discover the new secrets of funding real estate deals in the post-bubble real estate market, where traditional lending sources are getting very difficult to obtain. Download it today!

Real Estate Investing Strategy for Rehabs

This eBook is about residential rehabbing and the multiple strategies that can be used to maximize profits in this current economic climate. My goal has always been to share knowledge with folks that are truly interested in rehabbing and view it as not only for monetary gain but also see is as an “art and science” like I do. Happy Rehabbing!!

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A FREE, step-by-step guide that will help you become a super real estate property investor. Learn all the basic and some advanced investing techniques that have generated millions for property investors. Ready for download now!

Financial Terms Dictionary – 100 Most Popular Financial Terms Explained

This practical financial dictionary helps you understand and comprehend more than 100 common financial terms. It was written with an emphasis to quickly grasp the context without using jargon. Every terms is explained in detail with 600 words or more and includes also examples. It is based on common usage as practiced by financial professionals.

The Prince by Niccolò Machiavelli

Niccolò di Bernardo dei Machiavelli was an Italian diplomat, politician, historian, philosopher, writer, playwright and poet of the Renaissance period. He has often been called the father of modern political philosophy and political science.

The Science of Getting Rich by W. D. Wattles

This book is pragmatical, not philosophical; a practical manual, not a treatise upon theories. It is intended for the men and women whose most pressing need is for money; who wish to get rich first, and philosophize afterward. It is for those who have, so far, found neither the time, the means, nor the opportunity to go deeply into the study of metaphysics, but who want results and who are willing to take the conclusions of science as a basis for action, without going into all the processes by which those conclusions were reached.

Sun Tzu Art of War

Written in the fifth century B.C., Suntzu and Wutzu still remain the most celebrated works on war in the literature of China. While the chariot has gone, and weapons have changed, these ancient masters have held their own, since they deal chiefly with the fundamental principles of war, with the influence of politics and human nature on military operations; and they show in a most striking way how unchanging these principles are.

Make Extra Money Flipping Houses While On Vacation by Jason Medley

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Achieving Wealth Through Real Estate: A Definitive Guide To Controlling Your Own Financial Destiny Through a Successful Real Estate Business

Have you ever thought about making money with real estate? In Achieving Wealth Through Real Estate: A Definitive Guide to Controlling Your Own Financial Destiny Through a Successful Real Estate Business, author and entrepreneur Kirill Bensonoff takes you through the process of starting your own real estate business step-by-step, featuring his expert tips and tricks.

Business Loans Uncovered

Knowing if you qualify is one of the most important things to know when applying  for a loan of any type. Blindly applying for a loan and being declined increases the chances of you being declined again and again because you not only lower your credit score each time you apply, multiple inquires also serves a red flag to other lenders and as a result lenders put you in a high risk category and charge higher interest rates in the event of an approval Includes: ​Traditional Lenders, Government Sources, The 7(a) loan guarantee program, SBA Low Doc loan program, SBA Express loan program, Factoring, Venture Capitalists, Angel Investors.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

Marketing Strategies for Real Estate Photography

One of the biggest problems that real estate photographers have once they have set up their business as a legal entity, obtained all the right equipment and perfected their technique is obtaining new clients.

Clients and customers are the lifeblood of any business, but how do you obtain new clients after starting your business?

By developing and executing a strategic marketing plan tailored to your business.

This short guide has been written to help real estate photographers develop their marketing plan and assist with winning new business.

It includes a series of digital and direct marketing strategies along with useful tips and lessons the author has learned from his own experiences that can save you time and money when growing your business.

A marketing action plan template has been included to help photographers execute the strategies learned in this guide book.

Books by Dr William Edward Deming

William Edwards Deming (October 14, 1900 – December 20, 1993) was an American engineer, statistician, professor, author, lecturer, and management consultant.

Educated initially as an electrical engineer and later specializing in mathematical physics, he helped develop the sampling techniques still used by the U.S. Department of the Census and the Bureau of Labor Statistics.

In his book The New Economics for Industry, Government, and Education Deming championed the work of Walter Shewhart, including statistical process control, operational definitions, and what Deming called the “Shewhart Cycle, which had evolved into Plan-Do-Study-Act (PDSA). That was in response to the growing popularity of PDCA, which Deming viewed as tampering with the meaning of Shewhart’s original work.

Deming is best known for his work in Japan after WWII, particularly his work with the leaders of Japanese industry. That work began in July and August 1950, in Tokyo and at the Hakone Convention Center, when Deming delivered speeches on what he called “Statistical Product Quality Administration”.

Many in Japan credit Deming as one of the inspirations for what has become known as the Japanese post-war economic miracle of 1950 to 1960, when Japan rose from the ashes of war on the road to becoming the second-largest economy in the world through processes partially influenced by the ideas Deming taught

Commercial Construction Loans Defined

A commercial construction loan is a type of loan that 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 of a new property, the purchase and development of land for a new commercial property, or the renovations of existing properties.

Why Take Out A Commercial Construction Loan?

Business owners that plan to purchase existing commercial properties can get a loan known as a commercial mortgage.

However, if you plan to renovate your existing space or construct a new building from the ground up, you’ll need to apply for a commercial construction loan.

New construction and renovations can be expensive — think hundreds of thousands or even millions of dollars.

Most growing businesses don’t have this type of cash on hand, so instead, they turn to a commercial construction loan.

With commercial construction loans, lenders provide 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. Most loans are structured so that the borrower receives the full amount of the loan as one lump sum. Once the loan is received, the borrower begins to pay back the loan through scheduled payments over a set period of time. Commercial mortgages, for example, often have a monthly repayment schedule over 10 years or longer.

With commercial construction loans, the full amount of the loan is not received up front. Instead, the borrower will work with the lender to create a draw schedule.

This means that partial amounts of the loan will be released as the project hits new milestones. For example, the first draw will be for the clearing and development of land.

The next draw may then occur when the foundation is poured. Another draw will be released when the building has been framed, and so on.

As each milestone is completed, a lender will typically require an inspector to confirm that the work is completed before releasing the next draw. This will continue until all milestones have been completed and the full amount of the loan has been distributed.

With a commercial construction loan, you will only pay interest on the portion of the loan proceeds that have been received. If the total cost of your new construction is $500,000 but the lender has released just $100,000, you will pay interest on $100,000.

Typically, a commercial construction loan is structured so that the borrower pays only the interest until the loan has been fully dispersed. Borrowers can then pay off the principle in one lump sum at the end of the construction project.

But once the project is done and the full amount of the loan is due, what does a borrower do next? Instead of having to make one large payment, the borrower now can receive a commercial mortgage.

The property will serve as collateral, and the borrower will use the funds from the commercial mortgage to pay back the commercial construction loan. With the new mortgage, the lender will now be locked into more affordable monthly payments over a longer period of time.

Other commercial construction loans like the Small Business Administration CDC/504 loan provides more long-term options so an additional loan following the completion of the project will not be needed.

Interest Rates

For commercial construction loans, borrowers should expect to pay interest rates between 4% and 12%. Borrowers with the best credit scores will receive the lowest interest rates. The type of lender you work with is also a factor. A commercial construction loan from a bank will typically have the lowest interest rate, while hard money lenders charge more interest for their loans.

Fees

There are several fees that may be associated with taking out a commercial construction loan. The fee types and amounts vary by lender. Some fees you may have to pay for this type of loan include:

• Guarantee Fees
• Processing Fees
• Documentation Fees
• Project review Fees
• Fund control Fees
• Down Payment

Because a commercial construction loan is a high-risk loan, a down payment is required. By paying a down payment, the borrower takes some of the risk off of the lender.

Typically, down payment requirements are 10% to 30% of the total project cost. Rarely will a lender fund 100% of the costs of a commercial construction project.

Conventional lenders use a calculation known as loan-to-cost for commercial construction loans.

The loan-to-cost ratio is calculated by dividing the total amount of the loan requested by the total project cost. Let’s say, for example, a business is requesting a loan of $190,000 for a project with a total cost of $200,000. The loan-to-cost in this example would be 95%.

Though requirements vary by lender, most require a loan-to-cost of 80% to 85%. For the example above, the lender would loan $160,000 at 80% and $170,000 at 85%.

If this occurs, what does the borrower do? While they may be forced to come up with the remaining costs out-of-pocket, there is another option — mezzanine loans — which we’ll discuss a little later.

Borrower Requirements: How Commercial Lenders Evaluate Eligibility

Not all construction projects are eligible for a commercial construction loan. There are several factors that a lender will consider in order to determine eligibility.

One of the first things that a lender will look at is your credit score. Because these are high-risk loans, lenders want to work with low-risk borrowers with high credit scores.

Though credit requirements vary by lender, you should have a credit score at least in the high 600’s before applying to qualify for loans such as the SBA CDC/504 loan. Other lenders may require a minimum score in the 700’s. Business credit scores will also be evaluated.

The lender will also consider your debt-to-income ratio, also known as DTI. This ratio shows the relationship between the income and the debt of your business on a monthly basis.

Typically, lenders look for a debt to income ratio of 43% or less, although some lenders may have stricter requirements. The lower your DTI, the higher your chances for approval. To calculate your DTI, use the following formula:

• Total Monthly Debt Payments / Gross Monthly Income = DTI

Lenders will also consider your debt service coverage ratio, or DSCR. This shows the relationship between the income and debt of your business on an annual basis. To calculate for yourself, use the following formula:

• Net Operating Income / Current Annual Debt Obligations = DSCR

The DSCR is a bit different from DTI because you want this number to be higher. This shows that your business is bringing in enough income to cover new debts.

Most lenders look for a DSCR of 1.25 or higher, but again, requirements vary by lender. Learn more about calculating your DSCR.

The lender will also look at your industry experience and your current business financials to determine if you qualify for a loan.

You’ll need to submit detailed construction plans for approval before a loan can be issued. In some cases, the plans may need to be altered based on any risks spotted by the lender, so your ability to be flexible in your plans is key.

Types Of Commercial Construction Loans

Now that you know more about the commercial construction loan process, it’s time to explore the different types of loans available.

• SBA CDC/504 Loan Program

The Small Business Administration (SBA) CDC/504 loan is one of the most popular commercial construction loans.

This is because these loans come with low down payments, competitive interest rates, and credit score requirements in the high 600s.

• Borrowing Amount
• No maximum, but the SBA will only fund up to $5 million
• Term Lengths 10 or 20 years
• Interest Rates
• Fixed rate based on US Treasury rates

Borrowing Fees

CDC servicing fee, CSA fee, guarantee fee, third party fees (however, most of these fees are rolled into the interest rate or cost of the loan)

• Possible prepayment penalty
• Personal Guarantee
• Guarantee required from anybody who owns at least 20% of the business
• Collateral
• Collateral required; usually the real estate/equipment financed
• Down Payment 10% – 30%
• With this loan, an SBA-approved Certified Development Company will fund 40% of the costs to renovate existing facilities, build new facilities, or purchase/improve land. Up to $5 million is available for borrowers.

Another lender will need to provide 50% of the project costs, while the borrower will be responsible for the remaining 10%.

In some cases, borrowers may be required to pay 20%. Repayment terms are available up to 20 years, and interest rates are based on the market rates of U.S. Treasury issues.

SBA 7(a) Loan Program

The SBA also has the 7(a) program, which can be used for the purchase or construction of commercial real estate.

Through this program, borrowers can receive up to $5 million with repayment terms up to 25 years. Interest rates are based on the prime rate plus a maximum of 2.75%. To qualify, borrowers should have a credit score in the high 600’s and a down payment of 10% to 20%.

Commercial Construction Loans – How To Get Construction Lending

Commercial Construction Loans

A commercial construction loan is a sum of money that is lent to a company that plans to construct a building and a business on a given site. Many companies that build strip malls, residential apartments and condos, and mixed-use buildings need to obtain a commercial construction loan to fund the construction – which can often be a lengthy process.

These loans can often be risky for banks and difficult to obtain. Yet, if you understand the risks involved and the application process, you shouldn’t encounter any major surprises.

1. What is a Commercial Construction Loan?

Commercial construction loans are generally loans that are submitted through a local bank, insurance company or finance institution that specializes in such loans.

These institutions generally have a solid grasp of the local markets and can analyze a company’s financial situation as well as the value of the land. The land value can be difficult to analyze because there are generally no businesses on the land prior to the loan. Thus, the bank needs to look at other factors to determine if the investment is sound.

The bank might analyze other businesses in the area as well as the profits and losses for those businesses. Usually, the bank will look at other businesses in the loan applicant’s category of work to determine the likelihood of profitability. The business will need to go through the loan process (described below). If the prospects seem reasonable to the bank, the loan can then move forward.

2. Who needs a Commercial Construction Loan?

Any commercial company that needs to borrow money to build on a site that does not have a current structure will need to seek out a commercial construction loan. This loan may cover costs that include cost of the land, cost of building supplies and cost of construction.

Generally, commercial companies that do not qualify for an investment real estate loan will seek out a commercial construction loan.

The commercial construction loan process can differ significantly from the investment real estate loan process because the bank does not have any previous information to take into account when making the decision.

The bank needs to make a decision regarding the loan based on something called the real estate pro forma, which is simply a projection of the expected income of the business. This is similar to a business plan, yet the real estate pro forma estimates how much revenue the property can attract.

A commercial loan has added risks for the bank providing the loan. Many factors can affect the repayment of the loan, such as added construction costs, delays and unforeseen issues in the business. The business may not see a profit in several years because of these factors.

Therefore, the bank must look at all angles of the process. The bank might look into the company’s contractor, building team and business team before making a decision. The past, present and future conditions of the business’s market will definitely be analyzed before a decision can be made.

3. How to Obtain a Commercial Construction Loan

The process to obtain a commercial construction loan can be lengthy but efficient. The first step is for the company to fill out and submit a loan through a bank that offers commercial construction loans. Various bank executives will look at the loan and go over the application. The bank will then internally give a yes or no answer.

The bank manager may then look over other factors to determine the risks of the loan and the stability of the company’s market. If the loan looks good, the bank manager will approve the initial application.

The bank’s underwriter will then set the terms of the loan in writing. These are simply preliminary terms that the company can look over to ensure the terms meet with the company’s expectations.

The company applying for the loan reviews the bank terms. If everything looks good, the company can then sign the terms and approve the loan on its end. This is not a binding contract, yet it sets the stage for the full deal.

The bank underwriter draws up the full and official loan agreement with terms to submit to the company. The company looks over the final agreement and signs it. This contract is the binding contract.

Once both parties have signed the contract, the agreement terms begin. The loan administrator funds the loan to the terms and agreements. Construction can finally begin, and the company can begin making payments as agreed upon in the contract.

4. Commercial Construction Loan Terms

Generally, there are two types of commercial construction loan terms: Short-term financing and long-term financing.

Short-term financing is available to a company before a certain point in a project. It can be up until the project is finished or up until the project has reached a certain point. This is generally a point in the project before the construction is complete and before the building is “open for business.” A short-term loan can be available for merely part of the project as well.

Long-term financing is available to companies that want to begin repaying the loan after the project is finished. This can either be once units begin renting within the structure or once the project has reached a maturation date agreed upon by the bank and the company in the original agreement.

A less common type of construction loan is the mini perm loan. This type of loan is a combination of short-term and long-term financing and can assist a company in refinancing and create an operating history.

5. Commercial Construction Loan Requirements

Since construction loans can be very risky for banks, the terms may be much stricter than most commercial loans. Some of the requirements needed to secure the loan include asking the company to contribute a minimum percentage of the costs for construction (often 20 to 30 percent of the total cost).

The bank may also need other information, like copies of the company’s tax returns and other financial documents. Companies should also plan to submit lists of current real estate holdings and the financial information for these holdings. The bank may also ask for a copy of the company’s pro forma or business plan for the construction project.

A company is more likely to be approved if a guarantor is included in the project. Like other loans, the company also needs to submit forms that include the projected costs of the project. The bank may ask to see specific plans, including engineering plans. Often, banks will contact the contractor of the project to assess the scope of the project.

What are Construction Loans and how do They Work

Commercial Construction Loans

A construction loan is a type of bank-issued short-term financing, created for the specific purpose of financing a new home or other real estate project.

The loan can be applied for by anyone who is investing their time and money in construction or related expenses. An individual homeowner, a contractor, or a small business owner can use construction loans to finance their construction project.

Not just for the actual building, a construction loan can also be used to pay for building equipment used in construction, building materials, or for hiring employees.

Here are some uses and things to know about construction loans:

New construction:

If you are an individual or small business owner who is looking for funding to build a new home for yourself or a client, then you can apply for a short-term construction loan. This type of loan can be used to pay for the construction of new buildings. Construction loans have high-interest rates owing to the risk involved.

Builders or homeowners who want to build custom homes generally look to a construction loan. After completing the project, you can refinance the loan into a mortgage, or you can repay it by taking a new loan from another financial institution.

Expect a big down payment:

Construction loans generally require a large down payment of around 20-25% of the total cost of the project, usually the cost of construction and mortgage.

Thorough application process: When you apply for a construction loan, you’ll be asked to provide the details of your construction project, including like the total amount of funding required, details about the builder, a detailed project timeline, the floorplans or construction drawings, the cost of materials, and the cost of labor.

Look out for paperwork:

Until recently, it was hard to find lenders offering construction loans online. If you know you want to apply for a construction loan, you might find it easiest to visit your local bank or regional credit unions and ask for information in person.

These institutes will be aware of the local property and construction market, and should be able to help you create a plan for your application.

Types of Construction Loans:

Construction Mortgage Loans:

This is a loan you can use to finance the purchase of land, or construction of a home on land you already own. These loans are usually structured so that the lender pays a percentage of the completion costs and you, the builder or developer, pay the rest.

During construction, the lender will release your funds in a series of payments, called “draws.” Typically, the lender will require an inspection between draws to check that the project is proceeding as planned.

As the borrower, you are responsible for paying interest on the amount of funds you use. This is different from a term loan, where you get a lump sum payment at once, and then pay back interest on the whole amount. Once your construction is complete and your interest paid, you’re responsible for repaying the entire loan amount by the due date.

Generally, construction loans have short terms because they reflect the amount of time it would take to build the project; a year-long term is common.

Construction-to-Permanent Loans:

Also called the CPloan, construction-to-permanent loans are another option for financing the building of a new home. CPloans offer some extra convenience to borrowers by combining two types of loans in a single process.

During construction, if you have a construction-to-permanent loan, you only pay interest on the outstanding balance, at an adjustable rate determined by the lender and pegged to the prime rate. The prime rate is a widely-used benchmark based on the federal funds rate, which is set by the Federal Reserve, meaning that if the Fed raises rates, then the interest rate on your construction-to-permanent loan will rise, too.

When the construction phase is over, the C2P loan converts into a standard 15- or 30-year mortgage where you pay principal and interest.

The advantage of construction-to-permanent loans for small business owners and homeowners is that instead of having to get a loan for the construction phase and then a second for financing the finished project, you get two loans at once. In this scenario, you only close once and pay one set of closing costs.

Commercial Construction Loans:

If you’re thinking bigger and planning to construct a multi-family home or apartment building, high-rise, multi-unit retail center, commercial office building, or other type of larger project, then you should probably be looking for a commercial construction loan.

Lenders for modern commercial construction loans for apartments and similar big projects are extremely risk-avoidant, and will expect a developer to shoulder most of the risk by covering up to 90% of the cost of the project. If you’re involved with this type of commercial project, you’ll need to be prepared with a lot of cash on hand to fund the construction yourself.

What are the Reasons for Getting a Construction Loan?

Purchase Equipment and Materials:

You can use a construction loan to buy material and equipment that will be used in the construction of the new home.

Expanding a Company’s Facility:

If you are a small business owner with a physical location and you need to build a new office or remodel an existing one, then you can use construction loans to finance your construction project.

Hiring and Training Employees:

You can use the funds from a construction loan to hire new employees for construction purposes. You can also finance education and training costs for those employees with your construction loan.

Overcoming Damage or Disaster Expenses:

If your office or commercial property is damaged by unforeseen circumstances like an earthquake or other disaster, you can use construction loans to make necessary repairs.

How Can You to Qualify for a Construction Loan?

Most lenders consider construction loans risky, so you’ll face some stiff requirements if you decide to apply.

Here are things lenders require

Down payment:

To get a construction loan, you’ll need to make a down payment of 20% or more of the cost of the total project. This means that you will need to be prepared to start the project with your own funds or assets before a lender will agree to loan more. If you already own the land, for example, it’s likely that you will be able to use that toward the down payment amount.

Talk to your lender about this. The particular amount of your down payment will depend on the cost of your project, the land, and what you plan to do with the funds. Lenders require high down payments as a way of making sure you’re invested in the project and won’t vanish if things go wrong during construction.

Strong personal credit:

Anytime you apply for a construction loan, you’ll need to provide the lender with your personal credit history–even if you are applying as a small business. The lender will almost definitely want to see your personal FICO score and your business credit history, too.

Financial documents:

Typically, a prospective lender will analyze your current and past debt and payment history, as well as any other loans or liens you may have on your property. Whether this loan is for your own home, or for a small business construction project, you’ll be asked to provide financial statements, tax returns, and proof of other assets.

Good reputation:

Whether you are the builder, or you are working with a builder, know that the lender will scrutinize the builder’s reputation. Any public information is fair game for making this judgement call: vendor and subcontractor reviews, online reviews, and previous work history.

If you are working with a builder, they should not hesitate to provide evidence of their good reputation, along with the detailed project plans and cost estimates you’ll also need.

If you need help finding a qualified builder, check out one of the many National Association of Home Builders chapters closest to you. A trusted local builder with a solid history of successfully completed projects will have an easier time getting a vote of approval from a financial institution in the form of a construction loan.

Specific plans:

To qualify for a construction loan, you must have specific and detailed building plans, construction contracts, and cost estimates ready.

Appraisal:

It’s challenging to appraise something that does not exist yet! Of course, there are experts who do just that every day. Construction lenders work with appraisers to analyze your project when you apply for a loan. They review the specifications of your construction project and compare it with other existing constructions of similar specifications.

They then draw conclusions regarding the possible worth of the construction in the future. It is very important to get a good appraisal if your construction loan is to be accepted. You can get an independent appraisal if you want, but your lender will insist on conducting their own.

 

How Commercial Construction Loans Work

Securing a commercial construction loan for various types of commercial real estate can be a difficult process to navigate. This post will shed some light on commercial construction loans and demystify the lending process.

Commercial Construction Loans and Lenders

The construction loan process begins when a developer submits a loan request with a lender. Construction or development lenders are almost always local community and regional banks.

Historically this was due to bank regulation that restricted trade areas for lending. More recently, life insurance companies, national banks, and other specialty finance companies have also started making construction loans.

However, community and regional banks still provide the majority of construction financing, since they have a much better understanding of local market conditions and the reputation of real estate developers than larger out of area banks.

There are two normally two loans required to finance a real estate development project, although sometimes these two loans will also be combined into one:

Short term financing. This stage of financing funds the construction and lease up phase of the project.

Long term permanent financing. After a project achieves “stabilization” and leases up to the market level of occupancy, the construction loan is “taken out” by longer term financing.

When a bank combines these two loans into one it’s usually in the form of a construction and mini-perm loan. The mini-perm is financing that takes out the construction loan, but is shorter in duration than traditional permanent financing.

The purpose of the mini-perm is to pay off the construction loan and provide the project with an operating history prior to refinancing in the perm market.

Commercial Construction Loan Underwriting

After the initial loan request is submitted, the bank typically goes through a quick internal go/no-go decision process.

If the project is given the go-ahead by the bank’s senior lender, the lender will sometimes issue a term sheet which outlines the terms and conditions of the proposed loan, provided all of the information presented is accurate and reasonable.

Once the non-binding term sheet has been reviewed, negotiated, and accepted, the lender will move forward with a full underwriting and approval of the proposed loan.

During the underwriting process the lender will evaluate the proposed project’s proforma, the details of the construction budget, the local market conditions, the development team and financial capacity of the guarantors, and in general address any other risks inherent in the loan request.

Typical documents required in the underwriting process include borrower/guarantor tax returns, financial statements, a schedule of real estate owned and contingent liabilities for the guarantor(s), the proposed project’s proforma, construction loan sources and uses, cost estimates, full project plans, engineering specifications, and in general, any other documents that can support the loan request.

From an underwriting standpoint, one of the most notable differences between a commercial construction loan and an investment real estate loan is that with a construction loan there is no operating history to underwrite.

The economics of the project, and thus the valuation of the property, is based solely on the real estate proforma.

The credit approval process is similar to other commercial loans, but because of the additional risks inherent in construction loans, further consideration is given to the development team and general contractor, as well as the prevailing market conditions.

Once the commercial construction loan is approved, the bank will issue a binding commitment letter to the borrower.

The commitment letter is similar to the term sheet, but contains much more detail about the terms of the loan.

Additionally, the commitment letter is a legally-binding contract whereas the term sheet is non-binding.

Commercial Construction Loan Closing and Beyond

Upon completion of the loan underwriting and approval, a loan then moves into the closing process, which can take on a life of its own.

Commercial construction loan closings are complex and involve an overwhelming quantity of documentation and procedural nuances. Typically, the closing is handled by the lender’s attorney, the borrower, and the borrower’s attorney.

A loan closing checklist is also normally issued to the developer along with the commitment letter, which outlines in detail what needs to be completed before the loan can close and funding can begin.

After a loan closes, the loan mechanics are primarily the responsibility of the loan administration department within a bank.

The loan administers (sometimes just called the loan admin), will fund the loan according to the internal policies and procedures of the bank.

Commercial construction loans are typically funded partially at closing to cover previously paid soft and hard costs.

After the initial partial funding, loan proceeds are disbursed monthly based on draw requests for costs incurred. These costs are submitted by the developer and verified by the lender.

Commercial construction loans can quickly become complex and difficult to secure. But understanding how construction loans work and how commercial developments are evaluated by lenders can help demystify the funding process.

In future posts we’ll dive into various parts of this process in detail. In the meantime, if you have any specific questions about commercial construction loans, please let us know in the comments below.

COMMERCIAL REAL ESTATE BRIDGE FINANCING

Real Estate Investing

Winston Rowe & Associates is pleased to announce their new major market commercial real estate bridge financing program.

This is one of the most aggressive commercial real estate bridge financing programs in the industry.

No Upfront or Advance Fees

$1MM – $25MM+

6-36 mo terms

9–11%, 2–4 points

Development/construction deals, major rehab,
cash out and even land deals considered

2-3 week closing

Winston Rowe & Associates is a unique type of commercial real estate finance firm, they do not charge any upfront fees like their competitors to review or perform due diligence for your transaction, because of this savvy investors have been turning to them for their financing needs.

 

Commercial Real Estate Construction Bridge Loans No Upfront Fees

Winston Rowe & Associates, a national commercial bridge loan financing specaliest, provides businesses with short-term bridge loans for up to three years with interest only payments.

If you have any questions concerning private or bridge or hard money financing, you can contact Winston Rowe & Associates at 248-246-2243 or visit them on line at http://www.winstonrowe.com

They have commercial bridge loans for commercial real estate in need of fast capital which can be used for acquisitions, refinances, construction, or to even save a piece of valuable real estate from foreclosure. These financing products are simple to obtain, can be funded faster than any commercial mortgage, and are offered at surprisingly competitive rates.

Winston Rowe & Associates No Upfront Fee Bridge Loan Solutions Include:

Hard Money Loans:

Winston Rowe & Associates hard money loans for deals with “hair” and LTV’s ranging from 50%-65% based on as-is cash sale value. Examples include: hard money development loans, very quick closings, distressed debt or partnership buyouts, bankruptcy loans, borrower background issues, etc.

DIP Loans:

Stalled projects where funding has dried up, they have solutions for additional capital for everyone’s benefit. Specifically, Winston Rowe & Associates Project Rescue & DIP Loans will fund priming DIP loans and bankruptcy plans; finish construction or entitlement; continue interest payments; cover operating expenses including taxes, payroll, utilities, insurance, HOA dues and marketing; avoid premature discounted sales and write-offs; and provide time to effectuate a repositioning plan or to simply wait for recovery. These loans are perfect for workouts, restructures and bankruptcy plans; a priming senior lien is required.

Bridge Loans:

Winston Rowe & Associates will fund short-term capital requirements needed to bridge a gap, but only with reasonably assured exit strategies. Examples include: completed condominium inventory loans, tenant improvement loans, and pre-sold residential or commercial lots.

Bridge Loan Criteria:

No Upfront Fees
Property Types: Any Commercial Real Estate
Loan Amounts: $1,000,000 & Up
Terms: 1 Day to 3 Years
Amortization: Interest Only
Maximum LTV: 65%
Recourse: Recourse; Non-Recourse On a Select Basis
Geographic Location: Nationwide
Funding: 14 days from complete submission of the due diligence package

National Hotel Resort Construction Financing No Upfront Fees Winston Rowe & Associates

Hotel Construction Financing No Upfront Fees

If you are looking for hotel construction financing, then look no further than Winston Rowe & Associates they have the years of experience to get you the right loan. No matter how big or small the hotel is, with swimming pools, meeting rooms, restaurants, etc. or not; whether it is flagged or non-flagged, a resort, motel, or inn; we possess the knowledge for the ins and outs of the hotel industry, and will ensure that your project could not be in better hands.

For more information about Winston Rowe & Associates hotel and resort financing solutions prospective clients can contact them directly at 248-246-2243 or visit them online at http://www.winstonrowe.com

Their financing has no upfront fee and comes with experienced professionals that can explain your financing plan and how your repayment plan will work, so there’s no guesswork. There’s little waiting time for hotel/motel financing, so you can purchase a property and start making a profit sooner.

Winston Rowe & Associates hotel and resort loan amounts range from $1,000,000 to $500 Million, with fixed rates and interest-only programs are offered with debt coverage ratios starting at 1.10 and up. Regardless of where your hotel will be built, within the United States, they will get you started to have your hotel up and running in no time.

In addition to hotel and resort construction financing solutions, Winston Rowe & Associates offers the best in traditional and private and hard money commercial real estate financing programs. When you call them with a loan scenario, they quickly assess what type of financing is appropriate for your situation. Then utilize their direct access to the most aggressive investor sources in the world to create a customized financing solution for clients.

Winston Rowe & Associates
248-246-2243

Winston Rowe & Associates has loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Winston Rowe & Associates Commercial Construction Loan

Winston Rowe & Associates Commercial Construction Loans

Just the other day, I heard a rather prominent commercial real estate mortgage industry insider (who wishes to remain anonymous) utter something like: “Sorry guys, no commercial lenders are making loans for commercial construction financing these days in this dismal economic downturn.” No wonder that industry insider wants to remain anonymous! He ought to because it seems to me that when executives start to parrot what they hear in the news media, they actually cause the doom and gloom that doesn’t really exist @ all before they proclaim it. Anyway, rest assured that you can get commercial construction loan financing – if you know where to look…

Perhaps where he comes from, commercial construction financing is hard to come by, but he was undoubtedly referring to traditional commercial real estate lenders. Now don’t get me wrong, conventional commercial lenders do have a solid rationale for being reluctant to provide construction loan financing: “In a down economy, lots of standing (existing) real estate sits vacant or unsold on the market. So, why the heck should we finance new construction?”

OK, we get their point, but there are still a lot of good solid new construction projects out there that need to be funded, and yours may just be one of them. If so, private commercial construction loan financing is where it’s at. Here’s what it is, why you may need it, and how you can get access to $250,000 to $500 million in the ideal combination of private commercial mortgage loans and up to 100% joint venture equity capital…

Private Commercial Construction Loan Financing Defined

First of all, let’s define what a commercial construction loan actually is. Private commercial construction loans are typically short-term interim recourse commercial loans from non-bank sources (e.g. private investment firms, individual investors, hedge funds, etc) to finance construction costs. In a typical case, the lender would advance construction funds to you as the builder at periodically at set intervals as the work progresses. By “recourse”, we’re referring to loans where the lender may seek to recover money in addition to real property that the borrow pledges as collateral in the event of a loan default.

Why You May Need Private Money To Fund Your Commercial Construction Deals

Perhaps the toughest issue that we as commercial real estate investors and owners face–especially within this challenging economy is locating financing when our credit scores, resumes, and/or financial statements are less than stellar. Private lenders and equity capital financiers can work with you to find or devise the ideal combination of debt & equity to finance your commercial construction project. Plus, these private capital sources have much greater flexibility, can offer you more creative financing options, and they can fund your deals with eye-popping speed and efficiency.

How You Can Access Private Commercial Construction Loans and Equity Capital Financing

Based upon the information that you have just read, if you feel that either private commercial mortgage finance or private equity capital finance sources are appropriate for your new commercial construction real estate ventures, please just keep in mind that you certainly can get access to the most appropriate form of commercial construction loan financing for your business – as long as you know just where to look for it.

Charles Emery is a Commercial Real Estate Finance Consultant with Radiant Properties LLC, a Philadelphia, PA based real estate investment and commercial real estate finance consulting firm. Prior to his entrepreneurial endeavors, Charles worked as a Commercial Credit Analyst at a large Philadelphia area regional bank where he provided Commercial Lenders with financial, business and industry analysis, upon which those Loan Officers based their commercial loan funding decisions. He also performed marketing & sales calls along with new business prospecting as part of his overall commercial lending related work responsibilities.

Winston Rowe & Associates has commercial real estate loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Commercial Construction Loans No Upfront Fees

Construction Loans

Winston Rowe & Associates provides no upfront fee construction loans to build projects such as apartment buildings, mixed use/apartment buildings, self-storage facilities, retail office buildings, warehouses light industrial properties, special purpose/unique properties, hotels motels, restaurants, and multi-family housing.

They have quickly become a recognized leader in the commercial construction market because of their highly competitive, flexible commercial loans.

Commercial Construction Loan Criteria:

No Upfront or Advance Fees
Close in 30 Days
National Coverage
Minimum Loan Amount $5,000,000 with no limit
Maximum Loan to Value 65%

Winston Rowe & Associates provides unparalleled service to its clients and is one of the fastest growing consulting firms in the commercial construction financing market. Their concise delivery is often imitated, but never duplicated.

Winston Rowe And Associates Policies, Notifications and Disclaimers

Winston Rowe and Associates

Policies, Notifications and Disclaimers

Email, Communication, Telephone, Text, Written, Business or Personal Marketing Correspondence(s).

Data for business marketing is obtained from direct contact and open public sources available to anyone that has access to the Internet.

Email, business and verbal marketing correspondence for any commercial real estate financing solution(s) or business service(s) are an amalgamation or puffery of Winston Rowe and Associates, Winston Rowe and Winstonrowe.com Co and any other business, contact(s), or associate(s), or passer by’s and capital source(s) program(s), or service(s) and or business service(s) that may or may not be available from time to time.

Any and all email(s) and marketing correspondence, conversations are for discussion purposes only, not an offer to provide a loan(s) or business service(s) of any type.

Click on the links for a past and current copies of the Public Notice press releases, widely available to anyone and everyone that has access to the Internet also known as the world wide web can down load and read the said press releases.

2022 Public Notice, Winston Rowe and Associates

Important public notice updated for 2022 to all interested parties to all concerning Winston Rowe or Winston Rowe and Associates or Winstonrowe.com Co

ST. CLAIR SHORES, Mich. – Jan. 15, 2022 – PRLog — This is a public notice pursuant to whom Winston Rowe or Winston Rowe and Associates or Winstonrowe.com co is from time to time.

Winston Rowe or Winston Rowe Associates or Winstonrowe.com Co is not a lender, does not make loans of any type or credit decisions in connections with loans of any type.

Winston Rowe or Winston Rowe & Associates or Winstonrowe.com Co is a business name used for business trade name (mark) and business identity and is NOT A REAL PERSON LIVING OR DEAD.

HOW THE COMPANY NAME WAS ARRIVED AT:

The company name Winston Rowe & Associates is a play on words and was developed during the watching of T.V. a long time ago by combining Winston Churchill and T Rowe Price.

USE OF TRADE & COMPANY AND OR BUSINESS NAMES:

The use of trade, business names and company names as well as corporate identities, logos and marks is a well-established legal practice throughout business and history in the United States of America.

WINSTON ROWE & ASSOCIATES AND WINSTONROWE.COM CO BUSINESS DESCRIPTION:

Winston Rowe or Winstonrowe.com Co or Winston Rowe & Associates, is a national consulting, advisory and due diligence firm specializes in assisting clients as an advisor and consultant for business owners.

PRODUCTS & SERVICES NOTIFICATION:

Please go to https://www.winstonrowe.com for more information about Winston Rowe & Associates, products, services and policies. Products and services are subject to change at any time without notice.

Public Notice Updated, Winston Rowe and Associates

This is a public notice pursuant to whom Winston Rowe or Winston Rowe and Associates or Winstonrowe.com co is from time to time.

Winston Rowe or Winston Rowe Associates or Winstonrowe.com Co is not a lender, does not make loans of any type or credit decisions in connections with loans of any type.

Winston Rowe or Winston Rowe & Associates or Winstonrowe.com Co is a business name used for business trade name and business identity purposes and is NOT A REAL PERSON LIVING OR DEAD.

HOW A COMPANY NAME WAS ARRIVED AT:

The company name Winston Rowe & Associates is a play on words and was developed during the watching of T.V. a long time ago by combining Winston Churchill and T Rowe Price.

USE OF TRADE & COMPANY AND OR BUSINESS NAMES:

The use of trade, business names and company names as well as corporate identities, logos and marks is a well-established legal practice throughout business and history in the United States of America.

WINSTON ROWE & ASSOCIATES AND WINSTONROWE.COM CO BUSINESS DESCRIPTION:

Winston Rowe or Winstonrowe.com Co or Winston Rowe & Associates, is a national consulting, advisory and due diligence firm specializes in assisting clients as an advisor and consultant for business owners.

PRODUCTS & SERVICES NOTIFICATION:

Please go to https://www.winstonrowe.com for more information about Winston Rowe & Associates, products, services and policies. Products and services are subject to change at any time without notice.

Important notice updated for 2021 to all interested parties to all concerning Winston Rowe and Associates and Winstonrowe.com Co

SAINT CLAIR SHORES, Mich. – Feb. 25, 2021 – PRLog — Updated, the following is a public notice pursuant to whom Winston Rowe and Associates [winstonrowe.com co] is from time to time.

Winston Rowe and Associates and Winstonrowe.com Co is not a lender, does not make loans of any type or credit decisions in connections with loans of any type.

Winston Rowe (Winston Rowe & Associates) is a business name used for business trade name and business identity purposes and is NOT A REAL PERSON LIVING OR DEAD.

HOW A COMPANY NAME WAS ARRIVED AT:

The company name Winston Rowe & Associates is a play on words and was developed during the watching of T.V. a long time ago by combining Winston Churchill and T Rowe Price.

USE OF TRADE & COMPANY AND OR BUSINESS NAMES:

The use of trade, business names and company names as well as corporate identities, logos and marks is a well-established legal practice throughout business and history in the United States of America.

WINSTON ROWE & ASSOCIATES AND WINSTONROWE.COM CO BUSINESS DESCRIPTION:

Winston Rowe & Associates, is a national consulting, advisory and due diligence firm specializes in assisting clients as a advisor and consultant for business owners.

PRODUCTS & SERVICES NOTIFICATION:

Please go to https://www.winstonrowe.com for more information about Winston Rowe & Associates, products, services and policies. Products and services are subject to change at any time without notice.

PRESS RELEASE & BLOG, WEB SITE, META TAG AND PHRASES DISCLAIMER:

Winston Rowe & Associates is not a United States Securities Dealer or Broker, Depository Bank, Lender or U.S. Investment Adviser, Direct, Lender, Private Money, Lender, Banker, Mortgage Company, Commercial Lender, Commercial Bank, Hard Money Lender, Private Capital Firm, Private Equity Firm, Hedge Fund, Investment Fund, Mutual Fund, Stock Broker, Real Estate Agent, Money Finder or Banking Agent. Said English and non-English words and phrases can only be considered puffery and are NOT in any way making any warranty, guarantee, and or promises.

SEARCH ENGINE (SEO) COMPUTER PROGRAMS, COMPUTER CODE THIRD PARTY WEBSITE DISCLAIMER

The use of the English and non-English words or phrases in press releases or blog, forums, chat rooms, or in website titles and META tags, HTML, computer programs, computer code, machine code, third party websites, forums, news articles, chat rooms, tweets, search engines, search indexes, lists which include but are not limited to;  CAN only be considered SEO and puffery and are NOT in any way making any warranty, guarantee, and or promises.

2018 Public Notice – Winston Rowe and Associates

Important notice to all interested parties to all concerning Winston Rowe and Associates and Winstonrowe.com co

By: Winston Rowe and Associates

ST. CLAIR SHORES, Mich. – Dec. 12, 2018 – PRLog — The following is a public notice pursuant to whom Winston Rowe and Associates [winstonrowe.com co] is from time to time.

STATUS:

Winston Rowe & Associates [winstonrowe.com co] herein after known as Winston Rowe and Associate is NOT a United States Securities Dealer or Broker, Depository Bank, Pay Day Loan Company, Pawn Broker, Lender or U.S. Investment Adviser, Direct, Lender, Private Money, Lender, Banker, Mortgage Company, Commercial Lender, Commercial Bank, Hard Money Lender, Private Capital Firm, Private Equity Firm, Hedge Fund, Investment Fund, Mutual Fund, Stock Broker, Real Estate Agent, Money Finder or Banking Agent.

Winston Rowe and Associates and Winstonrowe.com co is not a lender, does not make loans of any type or credit decisions in connections with loans of any type.

Winston Rowe and Associates is a general business consulting firm.

Winston Rowe (Winston Rowe & Associates) is a business name used for business trade name and business identity purposes and is NOT A REAL PERSON LIVING OR DEAD.

HOW A COMPANY NAME WAS ARRIVED AT:

The company name Winston Rowe & Associates is a play on words and was developed during the watching of T.V. by combining Winston Churchill and T Rowe Price.

USE OF TRADE & COMPANY AND OR BUSINESS NAMES:

The use of trade, business names and company names as well as corporate identities, logos and marks is a well-established legal practice throughout business and history in the United States of America.

WINSTON ROWE & ASSOCIATES AND WINSTONROWE.COM CO BUSINESS DESCRIPTION:

Winston Rowe & Associates, a national no upfront fee non-investment consulting, advisory and due diligence firm specializes in assisting clients as a non-investment advisor and consultant for the structuring complex debt, private equity, private capital (hard money), and agency commercial real estate financing solutions.

NO UPFRONT FEE’S:

Please go to our website for http://www.winstonrowe.com

PRODUCTS & SERVICES NOTIFICATION:

Please go to http://www.winstonrowe.com for more information about Winston Rowe & Associates, products, services and policies. Products and services are subject to change at any time without notice.

PRESS RELEASE & BLOG, WEB SITE, META TAG AND PHRASES DISCLAIMER:

The use of the English and non-English words or phrases in press releases or blog, forums, chat rooms, or in website titles and META tags which include but are not limited to; Direct Lender, Lenders, Bank, Banking, Finance, Loans, Mortgage, Money, Private Banking Approach, Commercial Lender, Hard Money Lender and Refinancer. Are only English and non-English article titles, phrases and words DO NOT indicate in any way that Winston Rowe & Associates is a United States Securities Dealer or Broker, Depository Bank, Lender or U.S. Investment Adviser, Direct, Lender, Private Money, Lender, Banker, Mortgage Company, Commercial Lender, Commercial Bank, Hard Money Lender, Private Capital Firm, Private Equity Firm, Hedge Fund, Investment Fund, Mutual Fund, Stock Broker, Real Estate Agent, Money Finder or Banking Agent. Said English and non-English words, phrases, titles and META tags ARE NOT knowingly or willfully meant or designed to misrepresent, mislead or hoodwink persons, businesses, groups that wish to do business with Winston Rowe & Associates. Said English and non-English words and phrases can only be considered puffery and are NOT in any way making any warranty, guarantee, and or promises.

SEARCH ENGINE (SEO) COMPUTER PROGRAMS, COMPUTER CODE THIRD PARTY WEBSITE DISCLAIMER

The use of the English and non-English words or phrases in press releases or blog, forums, chat rooms, or in website titles and META tags, HTML, computer programs, computer code, machine code, third party websites, forums, news articles, chat rooms, tweets, search engines, search indexes, lists which include but are not limited to; Direct Lender, Lenders, Bank, Banking, Finance, Loans, Mortgage, Money, Private Banking Approach, Commercial Lender, Hard Money Lender and Refinancer are utilized for search engine optimization (SEO) only. Said English and non-English words and phrases, computer programs, computer code, machine code, CAN only be considered SEO and puffery and are NOT in any way making any warranty, guarantee, and or promises.

Public Notice – Concerning Published by Winston Rowe and Associates

Click on the above link for a copy of the Public Notice press release, widely available to anyone that has access to the Internet to down load this press release.

 

News, PR, blogs and Internet content published disclaimer pursuant to the First Amendment of the USA Constitution. For all interested parties.

By: Winston Rowe and Associates

DETROIT – March 6, 2019 – PRLog — To all concerning Winston Rowe & Associates [winstonrowe.com co] utilizes various sources from the Internet but not limited to. To develop news articles and press releases about various subjects. From time to time.

Said news articles and press releases cannot ever be deemed reliable or accurate and are only a nonprofessional opinion by the writer.

All content is published as an opinion.

Furthermore, publishing, speaking and writing is protected Free Speech as well as Freedom of the Press within the United States of America.

See The First Amendment to the United States of America Constitution.

“The First Amendment guarantees freedoms concerning religion, expression, assembly, and the right to petition.  It forbids Congress from both promoting one religion over others and also restricting an individual’s religious practices.  It guarantees freedom of expression by prohibiting Congress from restricting the press or the rights of individuals to speak freely.  It also guarantees the right of citizens to assemble peaceably and to petition their government.”

Published by Winston Rowe and Associates https://www.winstonrowe.com