Construction Financing

Construction financing refers to the funding obtained to cover the costs of building a new structure or renovating an existing one. Typically provided by banks or specialized lenders, this type of financing is structured as a short-term loan that covers expenses like materials, labor, and permits. The loan is often disbursed in stages, as construction progresses. Once the project is completed, the borrower may need to secure a long-term mortgage to pay off the construction loan. This financing helps developers and builders manage cash flow while ensuring projects are completed efficiently.