CapitalAxCapitalAx
    Commercial land development site

    Land Development Financing for Acquisition, Entitlements, and Infrastructure

    Raw land is the hardest asset type to finance. The lenders who do it require the right borrower profile, the right market, and a clear development path. We connect you with all three.

    Why Most Lenders Decline Land and How to Get Funded

    Land loans carry more risk than any other commercial financing category, which is why most conventional lenders avoid them entirely. Equity requirements run 30 50%, terms are shorter, and lenders scrutinize your development experience and exit strategy closely. CapitalAx recently arranged a $9.5M bridge loan for a 15.7 acre parcel through a private lender, a deal that required positioning the site's location fundamentals, the developer's track record, and a clear entitlement timeline. We work with banks, credit unions, and private lenders who specialize in A&D lending and understand the unique risk profile of land deals.

    Common Borrower Profiles

    • Land developers and builders
    • Master planned community developers
    • Commercial pad site developers
    • Investors acquiring entitled land
    • Builders purchasing finished lots

    Available Loan Structures

    • Acquisition and development (A&D) loans
    • Land acquisition with entitlement timeline
    • Lot development and infrastructure financing
    • Land banking programs
    • Seller financed acquisitions with lender takeout

    Underwriting Considerations

    • Entitlement status and timeline
    • Infrastructure and development costs
    • Absorption rate and market demand analysis
    • Environmental and geotechnical conditions
    • Exit strategy clarity and takeout commitment

    Common Challenges

    • Higher equity requirements (30% to 50% typical)
    • Entitlement risk and timeline uncertainty
    • Market timing and absorption risk
    • Infrastructure cost overruns
    • Interest carry during development period

    Why CapitalAx for Land Development Deals

    Land is the hardest asset to finance because most conventional lenders decline land deals outright. CapitalAx has closed land transactions including a $9.5M bridge loan for 15.7 acres, and maintains relationships with private lenders, family offices, and community banks that specialize in land acquisition and development lending, capital sources that most borrowers would never find on their own.

    Related Loan Programs

    Construction Loans
    Bridge Loans
    Commercial Mortgage

    Explore other property types we finance. Browse all property types.

    Markets We Serve

    Austin, Texas
    North Austin, Texas
    Leander, Texas
    Kyle, Texas
    Bastrop, Texas

    Tools & Calculators

    Deal Feasibility Analyzer

    Analyze whether a commercial real estate deal pencils before you commit capital.

    Max Loan Calculator

    Find out the maximum loan amount your property can support based on income and expenses.

    Commercial Mortgage and Loan Amortization Calculator

    Calculate commercial mortgage payments, total interest, and a month by month loan amortization schedule.

    Construction Interest Reserve Calculator

    Size interest reserve from the drawn balance, calculate loan to cost, and create an editable monthly draw schedule.

    Related Articles

    Construction Loan Guide
    How Bridge Loans Work
    Commercial Real Estate Loan Requirements
    The Commercial Real Estate Loan Process

    Related Case Studies

    15.7 Acre Land Bridge Loan

    $9.5MBridge Loans

    Frequently Asked Questions

    Land development loans generally require 30 50% equity, depending on the entitlement status, the developer's track record, and the market. Entitled land with approved plats and infrastructure plans can often achieve lower equity requirements (closer to 30%), while raw unentitled parcels may require 40 50% or more. Seller carryback can sometimes count toward the equity requirement with certain lenders.

    A land acquisition loan funds the purchase of the land only. An acquisition and development (A&D) loan covers both the land purchase and the infrastructure development costs, grading, roads, utilities, drainage, needed to create buildable lots. A&D loans are structured with draws against a development budget, similar to construction financing, and require detailed cost estimates and engineering plans.

    Lenders assess where the property is in the entitlement process, zoning approval, plat recording, utility commitments, and environmental clearances. Fully entitled land with recorded plats and utility agreements carries significantly less risk than raw land pending zoning changes. CapitalAx packages land deals with entitlement timelines, comparable sales, and feasibility data to position the risk appropriately for each lender.

    Generally, yes. Approved zoning, recorded plats, utility commitments, and a documented development plan remove some of the uncertainty a lender faces with raw land. The sponsor, local demand, development budget, and exit still matter. Entitlement progress improves the story but does not replace a credible execution plan.

    In an A&D structure, lenders commonly advance funds through draws against an approved budget as work is completed and inspected. The request usually includes contractor documentation, invoices, and an updated view of remaining costs. A clear contingency and a well defined source for cost overruns are central to the underwriting.

    Lenders want a specific route to repayment, not a general expectation that the land will appreciate. Common exits include finished lot sales, a construction loan after horizontal work, a sale to a builder, or a refinance once the project reaches a more financeable stage. The schedule, demand assumptions, and sponsor track record have to support that route.

    Finance Your Land Development Project

    Tell us about your property and financing needs. We'll connect you with lenders who specialize in this asset class.