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Ontario Commercial Construction Loans

With Ontario construction loans, and in all of our construction financing Canada, our team’s two highest goals are low rates and fast approval.

When an opportunity arises, you need to be positioned to strike. Our team can break-down the possible rates, closing deadlines, and what challenges you need to be aware of on a deal in a few minutes.

Rates & Term Length for Construction Loans in Ontario

Commercial construction loans are designed primarily as short term funding. They financing from the development of a property through leasing to renters. Many large traditional lenders will only provide permanent financing on properties after the building is fully lease. This allows the lender to review the history of financial details on an operational commercial property.

Construction loans, on the other hand, fill the gap between purchasing land and obtaining a permanent commercial real estate loan on a completed property. Consequently, construction loans hold a higher risk because they cover a building process where the scenario can rapidly change. Construction costs can increase over projections and contractors can fall behind their promised timelines. Because of a larger risk, construction loans in Ontario and throughout Canada typically offer higher rates than permanent commercial real estate loans

Underwriting Ontario Construction Loans

With local commercial construction financing, the new property hasn’t been built and so there isn’t any financial track record for it. Consequently, underwriting is based on the project’s plans and financial projections. Alternatively, permanent commercial real estate loans are underwritten based on the real estate’s financial history.

As a result, our underwriting team starts by working up a detailed budget analysis of the property or construction project, analyzing the borrowers’ experience, the financials of any key investors, and pro-forma. During placement and underwriting of commercial construction loans in Ontario there is commonly a review of tax returns, proforma, budget projections and estimates, construction plans, past tax returns, pro-forma, and a detailed breakdown of how the financing will be alloted during the project. For more information on construction loans in Ontario and other regions of Canada or the USA, contact our team today.

Understand your options.

The starting place is to become informed. Once you understand your options, available rates, and timelines you can make good decisions.  Our Ontario business loan specialists are here for you – reach out today!