Commercial Real Estate Loans - Commercial Mortgages & Commercial Loans

90% LTV Commercial Construction Loans

(in conjunction with SBA 504 Program)

Commercial Loan Direct offers construction mortgages for commercial real estate properties nationwide in conjunction with our SBA-504 program.

  • Commercial Construction Loans Size: $750,000 -
    $10,000,000 (including 1st and interim 2nd financing)
  • Maximum LTVs (per SBA 504 guidelines)
    90% for multi-use properties (excludes start-up businesses)
    85% for special use properties (multi-use start up)
    80% for special use properties that are start-up businesses
    *Subject to construction loans guidelines below
  • Construction Loans - Interest Rate:
    Multi-use property - commercial construction loans: Prime + 1%, with a 7% floor
    Special-Use property - commercial construction loans: Prime + 1.5- 2.0%, with a 7% floor
  • Commercial Construction Loans Fee: 1.0% Minimum
  • Eligible Properties for Commercial Construction Loans: Multi-use properties and currently acceptable special use properties will be considered if the credit is sufficiently strong to justify the transaction. Must be located in an identifiable MSA. The project must be located in an area suitable for the intended use. Construction costs must be within acceptable norms (no unusual types of construction or elaborate improvements will
    be allowed)
  • Borrower / Eligible Operating Company Requirements:
    Borrower / operating company must have generated a DCR of ≥ 1.25 for the proposed debt over the past two years or have acceptable trends if a proposed expansion. Four years of operating history or equivalent ownership experience profitability, retained earnings / equity, and leverage, must all be equal to, or better than, the specific industry’s average.
    Borrower / guarantors must demonstrate strong credit characteristics including cash flow and liquidity adequate to pay
    for possible cost overruns of 10-15% of hard costs after equity injection. Combined outside net worth of the owners should be approximately 35% of the proposed loan amount
    FICO score of ≥ 700 for all owners (with more than 20% ownership interest). Ineligible if borrower, OC or principal has previously filed for protection under US bankruptcy law.
    Note: Borrowers that do not meet the above criteria may be considered for higher LTV financing by providing additional
    collateral / contingency or will be limited to a lower LTV
  • Fund Control / Bond / Third Party Guaranty:
    Lender will select the fund control company. In addition to fund control, if lender exceeds 65% and construction costs exceed $500,000 (or 25% of total project cost) lender requires a third party performance guaranty.
  • Permanent Loan: Lender’s current permanent loan program remains in effect. Approval by the SBA will be required prior to the lender.
  • Underwriting Requirements:
    In addition to the normal term loan underwriting requirements a Contractor Qualification statement acceptable to lender, detailed cost breakdown, construction contract, plans and specifications, and building permits are required.
  • Fee Summary: The lender's Construction Loan Fee is 1% of the construction loan amount, loan Documentation Fee is $1,800. The Initial Project Review, Fund Control and Guaranty are quoted on a case by case basis.