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.
Deal Structure at a Glance
Who Is This 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
Examples of how this financing can be used.
A multifamily developer building a 48 unit garden style apartment complex on entitled land, structuring a 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 the majority of space pre leased, securing construction financing based on executed LOIs and projected stabilized NOI.
Why Work With CapitalAx
We help borrowers organize construction loans requests and compare lending sources that may fit the transaction.
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.
Tools & Calculators
Construction Interest Reserve Calculator
Size interest reserve from the drawn balance, calculate loan to cost, and create an editable monthly draw schedule.
Debt Yield Calculator
Calculate debt yield from NOI and loan amount, and see the maximum loan a lender's debt yield floor allows.
Commercial Refinance Proceeds Calculator
Compare modeled loan limits and subtract payoff and costs to estimate cash out or an equity shortfall.
Property Financing Stress Test
Compare NOI, DSCR and supportable debt under changes in collected rent, expenses and borrowing rate.
Related Property Types
Looking for a different financing structure? Browse all loan programs.