Across the Southeast Texas Gulf Coast region, growing companies often need more space to support day-to-day activity. Whether expanding operations, building a new facility, or moving from a leased building into an owner-occupied property, you may need financial solutions to support construction.
What Are Commercial Real Estate Construction Loans?
Commercial real estate construction loans are a type of short-term financing used to fund the development, renovation, or expansion of commercial properties. These loans are specifically structured to support the unique phases of construction.
Instead of receiving the full loan amount upfront, funds are distributed over time as your project progresses through a draw schedule.
How Commercial Construction Loans Work
- Planning and Approval: A lender evaluates the full scope of the project, including costs, timelines, and feasibility.
- Funding Through a Draw Schedule: As construction milestones are completed, portions of the loan are released to cover labor, materials, and other expenses.
- Interest-Only Payments During Construction: During the build phase, you make interest-only payments to help manage cash flow.
- Transition to Long-Term Financing: Once construction is complete, the loan may convert into a term loan or permanent financing.
What Lenders Look For
Lenders consider your business’s financial strength and cash flow, the overall feasibility and timeline of your construction projects, the experience of your builders and contractors, and the long-term value of the completed property.
Planning for Construction in Texas
Building along the Southeast Texas Gulf Coast comes with its own considerations. When preparing, build flexibility into your timeline and budget, account for potential delays in materials or permitting, and work with lenders who understand regional conditions.
Find a Local Partner
At Texas Gulf Bank, we take a relationship-based approach. Whether you are building a new property, expanding an existing property, or planning renovation projects, start a conversation with one of our local lenders to discuss financing options.