Financing Commercial Construction Loans
RIO Commercial works closely with developers to identify viable commercial construction loans in Los Angeles. A formal and prepared loan presentation is made to a multitude of construction lenders. As a result we are able to find the best financing available for any commercial construction project in the Los Angeles Westside communities of Brentwood, Malibu, Santa Monica, Marina del Rey, Pacific Palisades, Venice, West Los Angeles and Westwood.
With a commercial construction loan in Los Angeles, typically the lender advances funds at periodic intervals of work progress. Construction loans usually serve as a recourse loan. Construction loans can also prove more flexible.
Conventional Commercial Construction Financing Terms
| Maximum loan to cost: | 80% to 90% |
| Maximum loan to value: | 70% to 80% of completed value |
| Term: | Generally 1 to 2 years with extensions as necessary |
| Amortization: | Interest only |
| Typical Rates: | Prime plus 0.5% to 2.0% or LIBOR plus 3.0% to 4.0% |
| Prepayment terms: | No prepayment penalty - but these loans often have a 1% exit fee if permanent loan is not done with same lender |
| Projects: | All commercial property types can be financed. Developer and contractor must have experience at this type and scale of development. |
| Recourse: | Typically recourse. a few lenders offer non-recourse construction financing for larger loans. |
| Closing costs: | Borrowers are responsible for all due diligence and closings costs (e.g. Appraisal, Phase 1 Environmental, site inspection, title, etc)
Most construction lenders also charge a 1% loan fee. |
** These are NOT terms of any specific lender and merely a representation of terms most often used in the marketplace. Do not rely on the above as a commitment to provide any specific terms on any specific deal. **