Whether you’re a builder or contractor, a small construction company, or even an individual interested in building a new home for yourself and your family, a construction loan might be the perfect financial vehicle to help you do it.
However, in today’s market, getting a construction loan isn’t always as easy as it seems. A traditional lender may take weeks to make a decision about the viability of your home construction project, and longer still to decide if you are qualified for their construction loan or construction mortgage.
That’s where Lendified comes in. We understand the challenges involved in obtaining financing for your home construction project or small business, and we want to help you succeed. With our Flexible Loan program, we can provide you with the smart financing solutions you need to get ahead, allowing you access to the money you need to complete your home construction project in a timely manner.
What is a Construction Loan?
A construction loan is essentially a short-term loan, but one tailored specifically for use by an individual home builder, or by smaller companies in the construction industry. Construction loans are used to finance either the construction of a new home or real estate project, or they can be used to refurbish or repair an existing home.
Construction loans are not meant to cover the entire cost of the project, but are used as a temporary financing bridge to cover the cost of the project during the build time. Typically, after the home is built and construction is complete, the homeowner (or construction company) will obtain a longer-term solution by refinancing the existing construction loan and rolling over into a more traditional mortgage.
It is important to note, however, that because a traditional lender or bank may consider your construction project as a risky investment, the interest rate will likely be higher than you might expect from regular mortgages. Also, some construction loans have strict terms that must be adhered to, such as paying the loan off entirely by the time construction is complete.
This is why Lendified is so well-placed to provide you with the financing you require in a timely manner. We offer a total amount of up to $150,000 on a short-term basis, and the application can be completed in minutes. Not only that, but some of our clients have been known to receive approval in less than 48 hours!
How Does a Construction Loan Work?
Construction loans are short-term loans, usually designed to be used over the course of only one year.
After the builder has completed the build, the borrower usually does one of two things. First, they may refinance their construction loan into a more permanent mortgage for construction. This means that the new home’s mortgage will be owned by a bank or other traditional financial institution. Alternatively, the construction loan can be paid off by taking out a second loan, sometimes called an “End Loan,” which is essentially a longer-term form of a construction loan.
Construction loans have various repayment conditions and rules. Some will require the construction loan to be paid off completely by the end of construction, some only require interest payments to be made on the loan during the build. The conditions will depend on the lender you decide to go with.
In some cases, lenders choose to pay the loan amount directly to the construction company undertaking the project, rather than giving the money to the borrower. As each stage of the build is complete, the lender will transfer the payment in installments related to each stage of the building’s development.
At Lendified we understand that construction companies may need access to cash quickly in order to meet short-term demands. That’s why we offer short-term business loans that are fast, simple, and affordable. Our online application process can be completed in minutes and once you’re approved you can receive up to $150,000 in as fast as 48 hours.
Because home construction investments are considered risky by lenders, the down payment amount from a bank or other lender can be particularly high, sometimes 20% or more. This can present a difficulty for those that have a spotty credit history, or bad credit. This is another reason why Lendified is such a good partner. Why wait for months for a bank to grant you approval to complete your building when Lendified can help out with a construction loan within the week?
Some of the highlights of being involved with us are:
- Business financing from $5,000 to $150,000
- Get pre-qualified in a matter of minutes online
- Quick and easy application process – just answer a few questions about the nature of your business and provide a brief summary of your historical sales volumes
- After eligibility has been established, expect funds from your construction loan within 3-5 business days
If you’re looking for a quick and easy way to get a loan without the hassle involved when dealing with the bank, just fill out our easy online application form today.
What Can You Do With Construction Loans?
If you’re a builder, construction loans can help provide flexibility to help your business grow. This may include requirements such as hiring short-term (or long-term) employees, making payments to contractors, or even getting the materials you need to complete the job.
Below are just a few options for using the construction loan amount to pay your bills:
- Hiring skilled new employees to expand your business
- Get the materials you need to finish the home construction
- Buy or lease extra equipment to speed up construction
- Use the construction loans to plan and/or design a new project
And that’s not all. If you’re a builder or small company, you can even get creative with the funds from your construction loan. For example, when experiencing a slow-down in the low season (like the winter), you could use the financing from the construction loan to better market your business, engaging in initiatives such as social media, blogging, website and SEO, or building trust and credibility with the local community through testimonials and reviews.
The Bottom Line
Whether you are looking to pay vendors, purchase new equipment, or pay your contractors we are able to provide you with funding that is tailored to your specific business needs. Unlike traditional lenders, we can provide you with a pre-approved quote in minutes and upon approval, funds will be transferred to your account within 3-5 business days.
With Lendified, we can help you make your construction dream come true. On top of that, there’s really nothing to lose by applying. Find out just how easy it is, and apply for a construction loan today. And of course, if you have any questions, feel free to contact one of our representatives at any time – we’ll be glad to help walk you through the process!
With Lendified in your corner, who needs a bank?