Development Financing for Commercial Construction Projects

Construction Loans in Houston, TX

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Construction Loan Overview

As the saying goes, the best-laid plans often go awry. When it comes to construction projects, those plans tend to veer off course from time to time and never quite turn out the way their creators envisioned in the drawing-room. This makes creating a financial plan around construction a difficult task. Thankfully, construction loans in Houston, TX can help keep the project sailing on towards completion.

Construction Loans


Construction loans in Houston, TX work in a similar manner as other business loans. However, construction loans apply specifically to construction projects.

For one, this means that the lender will have experience with construction organizations, so they know how the industry operates. This creates a very solid layer of cohesion, with the lender better understanding the needs of the borrower.

Construction loans correlate the financials of the project with the project’s completion. While a traditional loan gets dispersed in a lump sum, construction loans disperse their funding slowly and at different levels. Each funding level corresponds to a specific part of the project, so only when a builder finishes one part of the project will they receive funding for the next. This process helps keep the project from exceeding its budget. It also helps the borrower with repayment should a delay arise. Instead of staying on the hook for the entire loan, they only need to worry about the amounts they already received.

Since construction loans are geared towards construction projects, the foundations of that project must be set in order to receive funding. This means the builder must have a construction plan, licensed contractors and an exit strategy ready to go. Without all three of these parts in place, the financier may refuse funding.

With securing funds as the final step required before construction can begin, the builder has a better idea of exactly how much funding they need to secure. A builder can use the money from a construction loan to finance all parts of the project including inspection costs. Construction loans come in three primary types.

Term Loan

This kind of loan functions as a short-term financing option. Instead of receiving funding for the entirety of the project, the term loan would act as full financing for one specific section. The time between applying and approval for a term loan is usually only a couple of days.

Term-to-Perm Loan

This loan can really assist with an ongoing construction project. What begins as short-term funding morphs into a long-term loan after completion of the project, easing the burden of the repayment process.


The Small Business Administration (SBA) offers loans that can help small businesses begin their endeavor, including a new construction process. The SBA offers many advantages including low-interest rates.


Is Financing Right for Your Business?

Financing empowers your business by allowing you to retain cash for operating expenses while moving ahead on major projects. Finding the right funding is often about matching your business plan with the right lenders.


When is a Construction Loan Right?
Only when considering a construction project. If you intend to start a different project, seek an alternative form of financing.
What are the Interest Rates?
Interest rates on construction loans vary depending on the lender and the borrower. Our loan brokers can help ensure that you get the best interest rate possible.
What do I Need to Qualify?
Construction plan, licensed contractor ready to go and an exit strategy.

Advantages of

Construction Loans

Specific for construction projects

Keeps the project from exceeding budget

Short and long term options available