Construction Capital for Ground-Up Projects

New builds don't fund like stabilized properties. Construction loans release capital in draws as work progresses, and the right structure keeps your project on track.

Draw Based Financing for Ground Up and Major Rehab Projects

Construction financing is the most complex loan structure in commercial real estate, draw schedules, third-party inspections, interest reserves, GC requirements, and a permanent takeout that has to be lined up before the first shovel goes in the ground. We structure financing through banks, credit unions, and private construction lenders for multifamily builds, hotel development, commercial build-to-suit projects, and major renovations. We help borrowers manage the moving parts so the capital flows on schedule.

Key Terms

Loan Range: $1M to $50M+
Terms: 12 to 36 months
LTC: Up to 80%
Draw Structure: Monthly progress draws
Interest: Interest reserve included
Exit: Perm takeout or sale

Who Is It For

  • Developers building ground-up commercial or multifamily projects
  • Investors undertaking major renovation or adaptive reuse
  • Builders with shovel-ready projects seeking competitive capital
  • Operators expanding existing facilities
  • Land owners with entitled projects ready for vertical construction

Common Use Cases

  • Ground-up multifamily development
  • Commercial build-to-suit construction
  • Hotel and hospitality new builds
  • Mixed-use and retail center development
  • Major renovation and repositioning projects

Borrower Scenarios

  • A multifamily developer building a 48-unit garden-style apartment complex on entitled land, structuring a $9.2M construction loan with monthly draws, a 24-month term, and a pre-arranged Fannie Mae permanent takeout.
  • A hotel operator converting a vacant 10 story office building in downtown Temple into a Courtyard by Marriott, requiring $7.4M in construction financing with a phased draw schedule tied to floor-by-floor conversion milestones.
  • A medical group constructing a 15,000 sq ft owner-occupied surgical center, using SBA 504 construction-to-permanent financing to minimize out-of-pocket costs and lock in a long-term below-market rate.
  • A retail developer building a 30,000 sq ft neighborhood shopping center with 60% pre-leased tenants, securing construction financing based on executed LOIs and projected stabilized NOI.

Why CapitalAx

Draw Schedule and Budget Structuring Expertise: Construction loans live and die on draw schedules. We work with your GC and the lender's inspector to structure realistic draw timelines, contingency reserves, and interest carry budgets that keep capital flowing without surprises.
Pre-Arranged Permanent Takeout Coordination: We line up permanent financing commitments before your construction loan closes, giving your construction lender confidence in the exit and giving you certainty about long-term rates and terms before the first shovel hits the ground.
Lender Selection Based on Project Type and Geography: Construction lenders specialize by asset type and market. We match your project with lenders who have active appetite for your specific property type in your specific geography, not generalists who slow-walk unfamiliar deals.

Frequently Asked Questions

What do I need to qualify for a construction loan?

Lenders typically require detailed plans and specs, a qualified general contractor, development experience, a strong personal financial statement, and often 20% to 30% equity in the project including land value.

How are funds disbursed on a construction loan?

Funds are drawn monthly or at project milestones, typically verified by a third-party inspector. The lender releases funds as work is completed according to the approved budget and draw schedule.