Financing a new building project
Construction financing supports a project that is built over time rather than purchased as a finished property. The review centers on the site, plans, development budget, builder, schedule, and expected completed value. Organizing those elements before seeking terms helps identify funding gaps and sequencing problems.
Site and project readiness
Document ownership or the proposed purchase of the land, site access, available utilities, and the intended use of the finished building. Confirm zoning and permit requirements with the appropriate local authorities. A parcel that looks suitable may still require work that affects the construction schedule and budget.
Building a complete budget
Separate land costs, site preparation, hard construction costs, professional fees, permits, financing expenses, and contingency funds. Explain allowances and exclusions in the contractor’s estimate. A realistic budget should address changes in scope and the cash needed between an expense being incurred and a draw being received.
Draws and progress inspections
Construction proceeds are commonly released through a draw process as work progresses. Ask how inspections, invoices, lien documentation, and approval steps fit together. Establish who prepares each request and when contractors expect payment so the funding process aligns with the project’s actual operating needs.
Builder and contract review
Provide the construction agreement, scope of work, payment schedule, and relevant builder background. Clarify how change orders are approved and recorded. The contract should make responsibilities understandable, including supervision, insurance, subcontractor coordination, and the handling of delays or incomplete work.
Completion and the exit plan
Plan for final inspections, required approvals, marketing or occupancy, and repayment of the construction debt. A sale and a refinance create different timelines and documentation needs. Include a schedule cushion so the project does not depend on every construction and closing milestone occurring on the earliest possible date.