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Construction Financing for Your Build

Fund a ground-up build or major renovation with construction financing structured around your draw schedule. Compare construction loan offers from multiple lenders.

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What Is It
What is construction financing?

Construction financing is a short-term loan that funds a building project through staged draws as work completes, rather than one lump sum. It covers land, materials, labor and permits, and is commonly structured as a construction-to-permanent loan that converts to a long-term mortgage on completion.

Borrowers include commercial developers, builders, contractors and business owners renovating their own facilities. Through BidMyCapital you can compare commercial construction financing from multiple lenders.

How It Works
How construction loans work
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Fund in draws

Money is released at milestones — foundation, framing, completion — as inspected.

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Construction-to-permanent

The short-term loan converts to a permanent mortgage when the build finishes.

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Repay or refinance

Permanent financing, refinance or sale settles the construction debt.

Costs
Construction financing costs

Construction loans carry higher rates than permanent mortgages — typically prime + a premium, or 8% to 15% for commercial and hard-money builds. Expect origination fees and draw-based interest, which only accrues on funds actually disbursed.

Eligibility
Construction loan requirements

Solid project plan

Architectural plans, permits and a realistic budget and timeline.

Vetted builder

Lenders require an experienced, licensed contractor.

Down payment / equity

Typically 20% to 30% of the project cost.

Take-out financing

A plan to repay or refinance when construction completes.

Related
Related funding guides
FAQ
Frequently asked questions
How does a construction loan work?

Funds are released in stages as construction milestones are met and inspected, so you only pay interest on what has been drawn.

What is a construction-to-permanent loan?

A single loan that funds the build through draws and then automatically converts to a permanent mortgage when construction is complete, avoiding a second closing.

Can contractors get construction loans?

Yes. Established contractors and builders can qualify using their track record, project plans and take-out financing.

What is a hard money construction loan?

A short-term, asset-based construction loan priced for speed and flexibility — typically 10% to 15%+ with 12 to 24 month terms.

How much do I need for a down payment?

Most construction lenders want 20% to 30% equity in the project before funding.

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