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The best commercial construction loans provide ample borrowing amounts, sufficient term lengths, and competitive rates. Find out if these loans are the right fit for your construction project.
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Commercial construction loans are a common way to finance the cost of building, developing, or renovating real estate assets. If your business is in building or expansion mode, there’s a good chance a commercial construction loan will be best suited to the task.
Commercial construction loans are a specialized form of lending that isn’t available from all lenders. Below, we’ll give you some of our best picks for commercial real estate loans and take a closer look at what commercial real estate loans are, how they work, and when they’re an appropriate solution for your business financing needs.
Learn More About Our Top Picks
| Company | Best For | Next StepsBest For |
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Lendio
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BHG Financial
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Fora Financial
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National Business Capital
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National Funding
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Live Oak Bank
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| Show Fewer Options |
Read more below to learn why we chose these options.
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The best commercial construction loans provide ample borrowing amounts, sufficient term lengths, and competitive rates. Many of the lenders on this list also offer SBA loans, which are often one of the best options small businesses can tap for construction capital.
| Borrowing Amounts | Term Lengths | SBA Loans Available | |
|---|---|---|---|
| Lendio | Up to $5 million (for SBA loans) | Varies by lender/product | |
| BHG Financial | Up to $500,000 | Up to 12 years | |
| Fora Financial | Up to $1.5 million | 4 - 18 months | |
| National Business Capital | Up to $5 million | Varies by lender/product | |
| National Funding | Up to $500,000 ($400,000 in some markets) | Varies by product | |
| Live Oak Bank | Varies by loan type | Varies by loan type |
Pros
Cons
At 4.8 out of 5 stars, Lendio is one of our highest-rated lenders. Lendio allows businesses to apply to every lender within its network with a single application. While many of these lenders don't offer loans large enough for most commercial construction projects, others can connect businesses with high-value SBA 7(a) and 504 loans.
SBA loan requirements are fairly consistent across lenders, but Lendio can help you find one who is eager to work with you and can do so on a timeline that works for you.
Pros
Cons
If you're looking to expand your business, consider getting a small business loan from BHG Financial. Through BHG Financial, borrowers can receive up to $500,000¹·² with long repayment terms and competitive interest rates.
While BHG's borrowing requirements are stringent, those who do qualify will be rewarded with long-term funding backed with excellent customer support. The easy application process, fast approvals (in as little as 24 hours),³ and funding in as little as three days³ make working with BHG Financial even sweeter.
Get Started With BHG Financial
Pros
Cons
Fora Financial’s short-term business loans generally won’t be the best construction solution for most companies. However, they can be a great tool for the construction companies that are themselves doing the work. Fora Financial offers high borrowing amounts which can be used to cover cash flow shortfalls during the construction process and allow you to continue working until you receive payment from the client.
Best of all, Fora Financial's credit requirements for borrowers are quite low, making it a great fallback option for companies that can't find construction funding elsewhere.
Get Started With Fora Financial
Pros
Cons
Like Lendio, National Business Capital is an aggregator service, meaning that you’ll apply to multiple lenders through a single application. For commercial construction loans, National Business Capital can provide both medium-term loans and SBA loans, as well as stop-gap solutions for construction companies.
One of the biggest selling points for National Business Capital is that you’ll get an assigned account manager to guide you through the process, which can be a major advantage if you're navigating the lending scene for the first time.
Get Started With National Business Capital
Pros
Cons
National Funding is one of the oldest and most established lenders in the business and has decades of experience financing construction companies. While you won't see borrowing amounts large enough to fund a commercial construction project outright, it can address a wide variety of construction-related costs.
We've found that National Funding excels at providing fast loans to construction companies that need an infusion of cash to manage cash flow, hire more workers, or purchase equipment.
Get Started With National Funding
Pros
Cons
For big commercial construction projects, you'll probably want to consider SBA loans (SBA 504 loans in particular). We love that Live Oak Bank is an SBA Preferred Lender that can fund businesses in all 50 states, making it both convenient and fast (as SBA lending goes). If you're looking at a rural construction project, you can also take advantage of Live Oak Bank's USDA loan services.
Despite Live Oak Bank's convenient online lending infrastructure, it is still a bank, which means you'll have to meet fairly high borrower requirements to get funding.
Get Started With Live Oak Bank
We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.
When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.
Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.
Read more about how we rate small business lenders.
Commercial construction loans are used to cover construction, renovation, and acquisition of property. Traditional commercial construction loans work a little differently than your typical business term loan, although it is possible to cover construction costs with a variety of loan types.
Traditional commercial loans are disbursed in phases as the project progress, with interest only accumulating on the amount that’s been disbursed. Most traditional commercial loans also don’t cover 100% of construction projects, so be prepared to make a down payment or use a mezzanine loan.
Check out our deep dive into commercial construction loans for more information.
For small business construction projects, many will be best served by an SBA 504 loan, which has low down payments and interest rates, long repayment terms, and reasonable credit score requirements. SBA 7(a) loans can also be used for construction projects.
To stay up to date on costs, check out our SBA loan rates page, which is updated monthly.
Construction companies looking for short-term financing, on the other hand, should consider commercial bridge loans.
When searching for a great commercial construction loan, you’ll want to keep in mind the size of the project, how quickly you need funding, and the resources you have available to use as collateral or a down payment.
For many small businesses, an SBA 504 loan will be the best option for major construction projects. Others may be better served by bank loans or alternative loans.
Need a broader selection of business loans? Check out our picks for the best small business loans.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
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