Traditional lenders such as banks and large institutional lenders tend to shy away from land or commercial construction loans. They’re averse to risks in the commercial real estate industry, such as permitting delays, cost overruns, market fluctuations, and whatever else they might consider outside of their wheelhouse.
As private lenders with extensive experience in commercial property development, construction, and lending, Enact Partners has a different perspective. We view commercial real estate lending and the projects our loans underwrite as exciting opportunities to drive success.
Understanding Business Real Estate Loans
Business real estate loans for construction projects, or commercial construction loans, are specifically designed to fund commercial property acquisition, development, or renovation. These loans provide developers and investors with the capital needed to cover construction costs. This includes labor, materials, permits, and other project expenses.
Unlike traditional mortgages focused on residential properties, business real estate loans cater to a broader range of projects, including:
- New construction: Building multi-family housing units, office spaces, retail centers, industrial facilities, and other commercial structures.
- Renovations and expansions: Upgrading existing properties to meet changing market demands or to expand operational capacity.
- Land acquisition: Securing land parcels for future development projects.
Key Advantages of Private Commercial Property Loans for Construction
While banks have long been a primary source of real estate financing, private lenders like Enact Partners offer several distinct advantages over these traditional financing sources.
Quicker Access to Funds
Traditional banks often have lengthy approval processes. Enact Partners has streamlined processes that prioritize getting borrowers the funding they need quickly. We tend to close deals in as few as 7 to 45 days. This agility allows our borrowers to act fast on promising real estate investment opportunities, giving them an edge over others.
Flexible Construction Financing Options
Unlike the one-size-fits-all approach of traditional banks, private lenders offer more adaptable solutions. We understand that every project has unique needs, so we tailor financing to specific projects. This includes interest rates, loan types and amounts, repayment schedules, and even collateral requirements.
Focus on Project Potential
Traditional banks often focus heavily on borrower credit score and past financial history. As private lenders, we take a different approach. We work with borrowers to understand the potential in their projects and their vision, not just the numbers on a piece of paper. This means we’re often more open to considering projects with strong prospects, even if a borrower’s financial background isn’t perfect.
Access to Construction Finance for Non-Traditional Projects
Traditional banks often steer clear of projects involving vacant buildings, unique properties, or land development because they consider such ventures too risky. At Enact Partners, we see things differently. We understand that innovation often involves stepping outside the ordinary, so we’re more open to considering projects with unconventional elements.
This “can-do” approach opens doors for developers with creative visions who might otherwise struggle to find funding for unique ideas. So, whether real estate investors are looking to revitalize a historic building, develop a mixed-use property, or tackle a large-scale land development project, Enact Partners can typically get borrowers the funds they need.
Assures Project Liquidity
Unexpected events such as bad weather or material shortages can cause delays and cost overruns. Enact Partners requires borrowers to have a “liquidity” buffer to handle unforeseen challenges and maintain project success.
Bottom Line
Private lending plays a vital role in facilitating the success of commercial construction projects. By understanding the advantages private lenders offer, including faster funding, flexible terms, and access to financing for unique projects, commercial property developers and investors can tap into new opportunities in a timely way and achieve their investment goals.
Partnering with an experienced and reputable private lender like Enact Partners provides access to the capital, expertise, and support borrowers need to move forward with their construction projects.
Contact Enact Partners today to discuss your commercial real estate financing needs. Call us at (760) 516-7776 or visit our website to learn more about our commercial real estate lending options.
