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<\/p>\nCommercial construction projects are pricey and few people have the cash on hand to pay for them. Whether you\u2019re renovating your healthcare facility or building a new retail location, a loan can help make the project affordable.<\/p>\n
In this guide we\u2019ll go over everything you need to know about a commercial construction loan, including specific rules and regulations in Virginia.<\/p>\n
A commercial construction loan funds different commercial construction and renovation projects. They can be used to renovate an office space you just bought or turn an old clothing store into a pet store. You could also use a commercial construction loan to build a new hospital on a plot of land you just purchased.<\/p>\n
Unlike a mortgage or a student loan, a commercial construction loan is short term funding. That means you usually have to pay back the loan within 12-18 months. The interest rates are often higher on construction loans, though they vary widely and can be between 2.2-18%.<\/p>\n
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With a normal loan, you get the entire portion upfront\u2013and have to pay interest on the total amount. With a construction loan, you only get a portion at a time. You have to pay off the first portion before getting more of the loan. With this setup, you only pay interest on the portion you currently have.<\/p>\n
If you got a construction loan for $500,000, but the first installment was $20,000, you\u2019d only pay interest on that $20,000. Once you pay back that $20,000, you could get another portion of your loan\u2013and would pay interest on that portion as well until you paid it back.<\/p>\n
Commercial construction loans in Virginia tend to work the same as in other states. You apply with a local bank, who either approves or rejects your application\u2013and decides if they\u2019re willing to lend you as much as you requested or a smaller amount.<\/p>\n
When looking at loans, you\u2019ll want to be aware of the different types of loans you can get to fund a commercial construction project:<\/p>\n
There\u2019s also a couple places where you can get your loan in Virginia. The first and most common is a trusted bank in your community. The Small Business Administration also provides 504 loans. These are utilized for renovation projects or equipment updates, not to fund new projects.<\/p>\n
Your commercial contractor is not responsible for helping you find or refinance a loan. In fact, it\u2019s often better to get advice from someone who is trained in that area! That being said, a good commercial contractor will help support your eligibility for a loan extension, should the construction project go on longer than expected. We recently did that for our client, Two Maids and a Mop<\/a>.<\/p>\n Still got questions? We\u2019ve got answers. Here\u2019s the answer to some of the most frequently asked questions about commercial construction loans. For more specific answers, check with local banks about their commercial construction loans. In our area, those banks could include Southern Bank, Blue Ride Bank, and Towne Bank.<\/p>\n The interest rate depends on the terms and conditions of your loan contract. However, the average rate can range from 2.2-18%. Your qualifications as a lendee, the type of loan you choose, and the type of construction project all influence what the interest rate will be.<\/p>\n Usually, lenders require at least 660 to grant a commercial construction loan, though this number can differ from lender to lender. The better your credit score, the better your chances of getting the loan.<\/p>\n Commercial banks do make construction loans, especially for short periods of time since they will gain their investment with interest back sooner. A short term construction loan is usually defined as a loan over a 12-18 month period.<\/p>\n Carlton Building Services specializes in repairs, maintenance, renovations, remodelings and build-outs for a variety of clients in Hampton Roads, Virginia Beach, and Chesapeake areas. We have years of experience handling projects in the retail, office, and healthcare space and would love to work with you on your next project!<\/p>\n To learn more about our services, check out past project highlights<\/a> or contact Carlton Building Services<\/a> to see how we can help with your next project.<\/p>\n","protected":false},"excerpt":{"rendered":" Commercial construction projects are pricey and few people have the cash on hand to pay for them. Whether you\u2019re renovating your healthcare facility or building a new retail location, a loan can help make the project affordable. In this guide we\u2019ll go over everything you need to know about a commercial construction loan, including specific […]<\/p>\n","protected":false},"author":3,"featured_media":1234,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[62],"tags":[118,199,198],"acf":[],"_links":{"self":[{"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/posts\/1233"}],"collection":[{"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/comments?post=1233"}],"version-history":[{"count":4,"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/posts\/1233\/revisions"}],"predecessor-version":[{"id":1449,"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/posts\/1233\/revisions\/1449"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/media\/1234"}],"wp:attachment":[{"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/media?parent=1233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/categories?post=1233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.carltonbuildingservices.com\/wp-json\/wp\/v2\/tags?post=1233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Frequently asked questions<\/h2>\n
What is the interest rate on a commercial construction loan in Virginia?<\/h3>\n
What is the minimum credit score to get a commercial construction loan in Virginia?<\/h3>\n
Do commercial banks make short term construction loans in Virginia?<\/h3>\n
Carlton Building Services in Hampton Roads Virginia<\/h2>\n