Construction projects have a lot of moving parts, including the process of securing financing. At FNB Small Business Finance, we put decades of construction lending experience to work for you, caring for every detail of the process. When you partner with our SBA lending team, you’ll get the funding you need to build your business and the expertise you need to keep the project running smoothly to completion.
The dedicated Construction Management Team at FNB Small Business Finance is committed to guiding you through every step of your project, from preparation to completion. We offer a range of features through our SBA construction loans that provide small business owners with access to flexible terms and ongoing support throughout the process. Unlike many SBA lenders, we maintain direct communication with you and your general contractor throughout the funding process. By understanding your business needs, we can create a lending solution that minimizes risk and maximizes capital for your construction project.
Solutions
- Up to 90% financing available
- Construction-to-Permanent financing, only one closing
- Contingency for cost overruns included in Project Cost
- Interim interest reserve included in Project Costs, loan payments are not due until the project is complete
- Includes contractor qualification, cost analysis, disbursement controls, site inspections at each draw request, and insurance requirements
Benefits
- No delays in rollover
- One loan, one closing, one set of documents, one rate and fee for SBA 7(a) loans
- We manage the draw requests, but no funds disbursed without your approval
- We can include funds for equipment, furniture, moving costs, working capital, and other needs in your construction loan package
FAQs
- What interest rate structures do you offer?
At FNB Small Business finance we offer every borrower the choice of a quarterly variable, 3-year fixed or 5-year fixed rate structure. You choose the best option for you and your business.
On a 504 loan the Certified Development Company loan, typically 40% of the project, has a fixed rate for 25 years.
- What types of construction projects does FNB Small Business Finance do?
Ground up construction of a new building
Additions / Expansions of currently owned building
Improvements to a building being purchased
Leasehold improvements / Buildouts of leased locations
- What if I’m leasing space for my business and need improvements?
We do leasehold improvement projects for business owners renting space for their business.
- How long is the term of the loan?
If you’re buying or building real estate the term of the SBA 7(a) or SBA 504 loan is usually 25 years plus the construction period. If we do an SBA 504 loan and you need a companion SBA 7(a) loan for costs not eligible under 504, that loan will have a 10-year term.
If you’re leasing and we’re doing leasehold improvements with an SBA 7(a) loan, it will be a 10-year term plus the construction period.
- What SBA products do you use for construction?
Depending on the nature of the project we offer either a SBA 7(a) loan or a SBA 504 loan – and sometimes a combination of the two. You choose the loan that best fits your needs.
We’ve had projects in the past that needed a 504 loan and an SBA 7(a) loan and an SBA Express Credit Line all for the same project and business operations. We can truly customize a solution for your needs.
- How much money do I need for a construction project?
Typically, you should expect to put 10% of the Total Project Cost in cash equity into the project. After injection, you should have a minimum of 3-6 months of living expenses in personal liquidity.
- What documents or supporting materials do I need to prepare?
To get started, it is recommended to have preliminary drawings and a written estimate from a qualified contractor.
To close your loan, you will need all required permits and approvals from the local jurisdiction. You should speak with your architect or contractor to help you understand all involved in getting these from your city, town and/or county.
- How can FNB Small Business Finance help me get started?
For your construction project, your Business Development Officer will set up a call for both you and your contractor with one of our Construction Loan Managers who can give you a detailed explanation of the construction process and answer any questions you might have related to construction. We like to set this call up as early in the process as possible so you are fully informed on what to expect and to get all your questions answered up front. Most of our borrowers have never been through a commercial construction project before and find this call very helpful and informative. Your Construction Loan Manager will work closely with both you and your contractor through the entire construction process.
- How long does the process take to close?
From submission of a complete loan package to credit underwriting to a credit decision normally takes about 10 business days.
Your closing timeline may vary depending on the needs of your project. We cannot close until you have all required permits and approvals from your city/town/county. Oftentimes those approvals are the last thing we get in closing process. We’ll work with you to get all other needed items while that permitting process is in motion. Your local architect, contractor or attorney can advise you on normal timelines for approval in your area.
- How do I get started?
We recommend as a best first step that you reach out to your nearest FNB Small Business Finance Business Development Officer who will schedule an initial call with you.
Pre-Application Checklist:
Ready to get started? The following list will help you prepare for our initial conversation:
- Estimated project costs
- Three years of tax returns, interim financial statements on existing business(es) including Income Statement, Balance Sheet, and Debt Schedule
- Three years of personal tax returns – all owners 20%+
- Personal Financial Statement – all owners 20%+
- For start-up businesses, please also include a business plan and two years of projctions with assumptions
