Ground-up construction loans
Quick answer
A ground-up construction loan finances building a commercial project from raw land through completion. The lender funds 70–85% of total project cost and releases it in draws as the build hits milestones, with interest charged only on what's drawn.
It's short-term — 12 to 24 months — and you repay by selling or refinancing into permanent financing.
Building from dirt is the riskiest thing a lender can finance, and they price and structure ground-up loans accordingly.
There's no existing building to fall back on, just your budget, your team, and your plan. Nail those and the financing is very doable.
Key takeaways
- → Funds release in draws from foundation through finishes — interest only on what's drawn.
- → Loan-to-cost runs 70–85%, so bring 15–30% equity in cash or land value.
- → Experience and a proven GC raise your leverage and lower your rate.
- → Repay by selling or refinancing into permanent financing at completion.
How ground-up financing works
The lender commits a total and releases it in draws tied to completed, inspected milestones. You don't get the money up front, which keeps carrying costs down and protects the lender.
Our draw schedule guide walks through the mechanics, and the commercial construction overview covers loan-to-cost.
Equity and what lenders need
Plan for 15 to 30% equity. Land you already own can cover much of it, which is one reason developers hold land.
Lenders underwrite the budget, timeline, your experience, and the exit. A detailed budget and a proven general contractor carry a lot of weight.
The exit
Every ground-up loan needs a repayment plan. You sell the finished project or refinance into permanent financing — for owner-occupied builds, an SBA 504 is a strong option.
If the permanent loan or a draw is delayed, a bridge loan keeps the project moving. eBoost Partners offers bridge construction financing for that gap.
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Related guides
Commercial construction overview
How commercial build loans work.
Multifamily construction loans
Apartments and multifamily builds.
Land development loans
Earlier-stage land financing.
Commercial construction loan rates
What ground-up financing costs.
Construction loan draw schedule
How draws and inspections work.
Bridge loans
Carry the project between phases.