Land, servicing, vertical construction, takeout. Each stage has its own lender, its own risk and its own paperwork. The desk has run them and knows what each lender needs to say yes.
Construction financing is the commercial file most residential brokers are most afraid of, and the one builders most want a broker for. A builder client is worth a project every year or two for a decade. The complexity is real, but it is a known sequence, and the desk has been through it enough times to know where each project gets stuck.
Raw or zoned land with no income. Low leverage, often private or alternative money, priced for the risk that nothing gets built. The desk sizes it against the takeout, not the land value.
Roads, utilities, permits. Funded in draws against progress, usually by the same lender as the build if the plan is credible.
The build itself. A construction lender advances against cost to complete, certified by a quantity surveyor, with the builder's equity in first. Presales matter on multi unit projects; a lender wants a percentage sold before advancing.
The permanent mortgage once the project is complete and leased or sold. Arranged before construction funds, because the construction lender will ask how they get repaid.
The number everything hangs on. Hard costs, soft costs, contingency, interest reserve, all reconciled against the builder's budget and the quantity surveyor's view.
How money is released against progress, who certifies it, what holdbacks apply. Set up properly at the start so the fourth draw does not stall the project.
Lenders lend to builders who have finished projects like this one. The desk presents the track record in the form the lender wants, or structures around a first time builder with a stronger general contractor.
Which lenders want 40 percent, which want 60, which will fund a rental building with none. Matched to the project before the builder commits to a marketing plan.
Land lenders, construction lenders and takeout lenders are often different institutions. The desk lines up all three so the project is financed end to end, not stage by stage in a panic.
A builder owns a serviced lot and wants to build six townhomes at a total cost of $4.2 million with an end value of $5.6 million. The desk arranges a construction facility at 70 percent of cost with the builder's land equity counted, an interest reserve built into the budget, monthly quantity surveyor draws, a 50 percent presale condition the builder meets in the first three months, and a takeout commitment for any units the builder keeps as rentals. One broker, one builder, one project financed end to end.
Start with a builder you already know and a small project. Read specialising in construction financing for the specialty path and bring the first project to the desk before the builder has signed anything. The desk will tell you whether it is financeable, at what stage the lenders will engage, and what the builder needs to prepare.
Part of the Commercial Deal Desk. Previous: difficult files. Next: private and alternative.
Book a discovery call and bring the project budget. The desk will tell you how it would be financed stage by stage.