Securing a commercial construction loan can be an arduous process if you aren’t prepared for it. There are multiple options for businesses looking for commercial construction financing, including contract financing, factoring, merchant cash advance/daily debit and SBA loans, but there is no standard set of requirements for what you need in order to apply.
We developed this rough outline of documents and information you may be asked to provide when applying for commercial construction financing. Keep in mind, these may vary depending on the lender, your time in business, credit history and other factors.
At a minimum, lenders will require a completed application form and some supporting documents.
Applying for your commercial construction loan
The first step in securing almost any type of funding is to complete an application with the lending institution. The important thing to know here is that application formats can vary. Some lenders, like Mobilization Funding, only require a single-page application that can be filled out in no time. Others, like those that offer government-backed SBA loans, can require many separate forms totaling dozens of pages that take you (and an accountant) months to properly prepare.
At a minimum, applications for commercial construction loans typically ask for the following:
1. Business name, address, phone number and Federal Tax ID number.
2. Details about the business owners (name, contact info, marital status etc.).
3. Work history, including amount of time in business, scope of work and references.
4. If you have any current legal judgements or liens against the business or the business owners.
For more information about financial planning, bidding strategies and project management for your commercial construction company, download our free e-book.
Once your application is complete, you’ll need to submit the supporting documentation. This step varies greatly depending on the lender and type of financing, but generally ties in with the requirements of the application.
Here are some frequently required documents:
- 1. Company bank statements from the last 3, 6 or 12 months. The statements show your business’s activity so that the lender can understand your cash flow and the amount of revenue flowing through your account.
- 2. Corporate and/or personal tax returns from prior years. Because these documents were filed with the government, they are commonly required in order to understand a company’s financial standing and history.
- 3. Profit and loss statements (also referred to as an income statement or P&L)
- 4. Balance sheets
- 5. Account receivables
- 6. Purchase orders
- 7. Schedule of Values for specific jobs
- 8. Upcoming or current contracts, which help assess your workload and pipeline.
- 9. Job costing
- 10. Professional licenses or government filings of your business, such as:
- Contractor’s or trade license for the state you are working in
- IRS Form stating your business’s Federal EIN Number.
- Articles of Incorporation
11. Owner information such as drivers’ license(s) and personal financial statements
You can learn more about commercial construction financing here. If you’re looking for a commercial construction loan provider who makes it easy for you to apply and get the money you need quickly, contact Mobilization Funding today.