With more than a decade of experience in originating commercial construction loans for projects in Kansas City, the Midwest, and on a national basis, MidCap can assist in all aspects of obtaining financing for your proposed construction loan. Our ability to source commercial construction loans is unmatched within the commercial mortgage brokerage industry. With our principal having spent years originating construction loans for some of the most active commercial banks in the Midwest, we understand not only the general process, but have a keen understanding of all the small things that add up to make a big difference. From the initial underwriting and construction loan budget, to the actual building of the project and the monthly draw process you will need to navigate through with the right capital provider. Having our assistance sourcing the right commercial construction loans at the beginning of the process will put your project on the right path towards success.
The construction loan process begins when a developer submits a commercial construction loan request. It is at this step that it is important to involve a commercial mortgage broker, such as MidCap, to insure the submittal covers all the necessary aspects. Construction loans are almost always sourced from commercial banks—be they local, regional, or national in scope. However, at times, life insurance companies and other specialty finance companies have provided commercial construction loans. When life insurance companies become involved in the construction loan process, it is most often a “construction-to-perm” loan, where the life insurance company also agrees to provide the permanent loan after construction.
After MidCap has gathered many different commercial construction loan options for our client, we will sit down and discuss which choice is most appropriate for your specific commercial real estate project. After a choice is made, the institution chosen will then begin their formal underwriting process. Assuming approval is received, the construction loan will then proceed with documentation. It is at this stage in the process that it is necessary to negotiate the fine points of how the construction loan will be funded, monitored, and the parameters under which overruns and other aspects of the commercial construction loan process will be handled. Once the loan has closed, the loan mechanics will primarily be the responsibility of the loan administration department of the bank chosen. There are wide variations between banking institutions regarding how the draw funding process of a commercial construction loan operates. Some banking institutions will monitor every single expense (down to how much the light bulbs cost), and others will take the approach that the developer is better suited to oversee the minor issues that arise during the construction loan process and will focus on the bigger picture. MidCap is well aware of the differences between all of the active commercial construction loan lenders in the marketplace and will assist in getting you to the right place from the beginning.