professionally dressed men at a construction site looking at paperwork

Commercial Construction Loans

Are you looking to expand or move your business by building in a new location in Northern Illinois or Southern Wisconsin? First National Bank and Trust (FNBT) has business construction loans to get your project started. Decisions are made in-house and we're committed to providing your business with the highest level of customer service. 

What Is A Commercial Construction Loan?

Commercial construction loans finance the cost of building or renovating commercial real estate buildings. You can use a business construction loan to buy commercially-zoned land, purchase materials, and pay your contractor. While construction is ongoing, you may be able to make interest-only payments. Once the work is done, the construction loan is typically replaced with a commercial mortgage.

How Commercial Construction Loans Work

Instead of receiving a lump sum payment after the loan closes, you establish a draw schedule tied to certain construction milestones. This enables you to pay your contractor as the work is completed while protecting you and your lender. You may be able to make interest-only payments during construction. However, you’ll need to pay more than the interest after construction is completed. So, make sure you will be able to afford the higher payments or have a plan for refinancing. Because a commercial construction loan is a higher risk loan (there is no physical asset yet to secure it), a down payment is required. Expect to put 10-30% down on the total cost of the project.

Types Of Construction Loans

The two primary types of commercial construction loans are:
  • Commercial Construction Loans: Short-term financing for your business construction project. Usually has to be paid off or refinanced with a commercial mortgage within a few years of the construction project’s completion.
  • Construction-to-Permanent Loans: Automatically converts to a longer-term commercial mortgage loan after construction is finished. This can be a convenient option that also helps you save on closing costs because there is only one closing.

Why Get A Construction Loan?

Unless you can afford to pay in cash for your commercial construction project, you’ll need financing. A construction loan, with the interest-only payment option, can be the most affordable option while the building is going up, since you can’t start earning income by operating in it or renting it out until it’s complete.
  • Purchase Equipment and Materials
  • Expand a Company’s Facility
  • Hiring and Training Employees
  • Overcoming Damage or Disaster Expenses

Apply For A Construction Loan In Southern Wisconsin Or Northern Illinois!

We make construction loans easy and offer Sound Advice to help your business be successful. You can see what your loan payment would be with our business loan calculator. We can also help with your business loan rates. If you want to forget “business as usual”, you’ve come to the right place! Meet with a business lender at an office near you. FNBT has convenient locations in Argyle, Beloit, Clinton, Darien, Delavan, Elkhorn, Janesville, Monroe, Walworth, and Williams Bay, WI and Rockton, Roscoe, and Winnebago, IL.