Applying for a Construction Loan Is Easy With These Tips From Columbia, MO’s Dependable Commercial Contractor

Building a new commercial property for your business is an exciting endeavor, but first, you will need to establish your plans for funding the project. Designing and building a space is an investment, and many mid-Missouri business owners choose to pay for it through a commercial construction loan. Not everybody is guaranteed a loan and must meet certain requirements, but with the right preparation, you can easily kickstart your next professional building with approval from a lender. Learn more from PCE Construction’s guide to commercial loans in Columbia, MO.

Why do business owners take out commercial construction loans in Columbia, MO? 

Commercial construction loans are for business owners who don’t want to pay for their new property out of pocket. Instead, they practice short-term financing and work with a bank to cover their building expenses. It is a simple process that moves from one stage to another until your commercial property is ready. To make sure your loan application is successful, follow these tips from our expert contractors in Columbia, MO.

How to Qualify for a Columbia, MO Construction Loan 

Meet the required down payment on your commercial property in Columbia, MO

Your first objective when getting approval for a commercial construction loan is to make a down payment on the project. This will be your first time contributing money to your commercial build, proving to the lender that you are reliable in meeting your payment requirements. For a construction loan in Columbia, MO, business owners usually pay at least 20% of the project’s total cost. 

Evaluate your credit score before taking the loan 

Lenders can also review your financing abilities by looking up your history and credit score. If you have any remaining debt, make sure to tie up those loose ends before applying for a commercial construction loan in Columbia, MO. Most business owners have a good chance of approval if their credit score is 740 or higher. However, the ideal credit score ranges from 800 to 850. 

Have your mid-MO commercial construction plans ready

Planning ahead comes with several perks, including the acceptance of your construction loan in Columbia, MO. A bank will appreciate seeing your designs early in the loan process because it allows them to budget your project realistically. Before meeting with a lender, you should already have a mid-MO commercial contractor picked out so they can send you blueprints and other important construction plans. This level of preparation shows that you’re passionate about bringing your commercial property to life, boosting your chances of getting the loan you need. 

Find a Columbia, MO commercial builder that meets your lender’s requirements

Some lenders will only approve your commercial construction loan if it meets a set of conditions, and one of those main conditions is the reliability of the contractors on your team. If a commercial builder looks promising but only has five years of experience, it might not be the right fit for your project in Columbia, MO. Take the time to research trusted commercial construction companies, or ask the lender if they have a list of their preferred builders. At PCE Construction, we have been in the mid-Missouri construction industry for over 35 years!

The timeline of a typical commercial construction loan in Columbia, MO 

After a commercial loan has been greenlit, the process moves quickly for everyone involved. Every commercial build varies from one owner to the next, but many of them follow a similar path, starting with lenders and ending at fund disbursement. 

Pre-qualification with mid-Missouri lenders

As we outlined above, you must first qualify for a loan before our commercial contractors can start building. You may consult more than one lender in the area, depending on your project needs, and it will be crucial to bring several documents. In addition to credit score reports and construction blueprints, you’ll also need to submit income statements. With all these materials, the bank can break down the cost of your commercial project in Columbia, MO.

Title search & appraisal

Once your application and all the necessary documents are submitted to the lender, they will request a title search, in which they send a person to verify that you are the legal owner of the property where you will build. During this stage, they will also determine how much money they want to offer for the loan by evaluating the property’s value.

Loan approval & closing 

If the submission goes according to plan and your commercial construction loan is approved, this is a huge step towards getting your new building. Your lender will give you a document clarifying the terms and conditions on how the loan will be disbursed. Then, you’ll move on to the closing process and sign all remaining contracts before building your Columbia, MO commercial property. 

Disburse the funds from your construction loan

The last step is receiving coverage throughout your commercial build process in mid-MO. At specific stages, from the foundation to utility installation, your lender will visit and inspect the property to confirm the project is moving along. This will continue until your commercial property is finally ready. 

When Building With a Construction Loan, You Can Depend on Our Commercial Contractors in Columbia, MO to Accomplish Your Build. Contact PCE Construction

Your upcoming commercial building will be simple to finance with PCE Construction’s trustworthy contractors. Our craftsmanship is well-known across Columbia, MO and surrounding communities, and we can help you get your construction loan approved. Reach out today to learn more about our construction experience and start visualizing your new property.