Business expansion is critical. Whether you need to add on to an existing space or finally build your own office instead of constantly renting, you need to understand your options. You may even be starting a brand-new business and build your property to your desired specifications.
You’re not alone when it comes to exploring options for business expansion. However, this can be a costly expense that you may not be able to afford. This is when it’s imperative to look at obtaining Florida new construction loans.
There are various things to explore when searching for a commercial loan. At Delancey Street, we’re here to show you what options are available.
Understanding Florida New Construction Loans
Before you get too heavily involved with how to get approved for a loan, you need to understand what Florida new construction loans actually are. These loans are available to finance costs associated with renovation or construction. The funds can be used for a variety of construction purposes. You can choose when to get the money based on what you’re buying, such as materials, labor, or inspections. From there, you can establish a payment plan that works well for your budget.
Why a Loan is Necessary
A new construction loan may be the best way for you to get the money needed to renovate your existing space or even construct a brand-new building. Since renovations and construction projects can be expensive, you have to consider how much cash you will need. Depending on the details of your project, it could be thousands of dollars. This may not be money that you have available.
Lenders can provide you with the funds that you need in order to get the construction process started.
How Loans Work
How new construction loans work in Florida will depend on the lender. These vary considerably from commercial mortgages. In most instances, commercial mortgages are paid back over 10 years and you receive the full amount as a lump sum. However, commercial construction loans involve getting money as the various stages of construction evolve. You will pay interest based on the amounts you have actually received. You can choose to pay off the principal in a full sum at the completion of the construction project or use the property as collateral while you make payments.
As you explore Florida commercial construction loans, you will want to look at several important components:
- Interest rates
- Down payment
Interest rates will need to be explored as it will impact how much you spend on the construction project in its entirety. Various fees may also be associated with the loan, including guarantee, documentation, and project review fees. Commercial construction loans are also identified as high-risk, requiring a down payment.
Commercial lenders will evaluate your eligibility based on your credit score. Most lenders will want to see a score in the high 600s. Your debt to income ratio will also be investigated. Your industry experience and your current business financials will also be requested in order to learn about your ability to pay back the loan amount.
When you work with the right company, applying for a commercial loan is easier than you might think.
At Delancey Street, we are here to empower entrepreneurs. We can help you to find the new construction loan in Florida that suits the project you are working on. Complete an application today in order to learn more about the loan opportunities that exist.