New Construction Loans

Asset-Based Lending for Builders and Construction Companies

Loans SPECIFICALLY designed for builders

How are we different???

Asset based lenders primarily evaluate the deal and the borrower's ability to complete the project. This includes a look at the borrowers credit worthiness, cash on hand for the project, current and future value of the project and feasibility of the budget.

Banks underwrite the borrower and the deal. They will evaluate the borrowers income from previous years and their ability to repay the loan outside of the deal. This is required for every loan you do with them, requiring the borrower update a complete underwriting file.

Asset based is simply that, SIMPLE.

Typical Loan Guidelines:

90% Loan to Total Cost
70% of Finished Construction Value
12-18 Months Initial Term
Min FICO 680
Previous Experience with Similar Projects
Max Loan Amount 5X Current Liquidity

Why Choose Asset Based

Beside the underwriting reasons above, when comparing asset based to bank money you must take your Return on Investment or ROI into account. Many call this your Cash on Cash return. When comparing the two loan estimates, look at all of the requirements of bank money including down payment, reserves and depository requirements.

Asset Based

90% Loan to Cost
No depository requirement
3 month interest reserve requirement

Bank Loans

60-80% Loan to Cost (10-25% more down payment than asset based)
Large depository requirement
6 month+ interest reserve requirement

Banks just require the builder to have significantly more capital in the deal which reduces ROI significantly.

Use less cash and do more deals with Asset Based Lending