Fill in the custom fields below to determine the possible financing options for your next construction project. If you are unsure of the current interest rate, we have included a link in Helpful Info you can use to check. To share this with members on your team, you can download the chart as a CSV.
Step 1: Input your Cost Per Sq. Foot, project Sq. Footage, and loan interest rate
Step 2: Enter the expected number of months and percentage of funds being released for each stage of construction
Step 3: Make sure the total number of months adds up to your expectations
Step 4: Calculate and export if needed
*Draw Scheduling is based on the assumption of equal funding withdrawal for each month of a given stage.*
*These figures should be taken as a rough estimate and not as a replacement for direct communication with a financial institution*
When securing a loan for large-scale construction projects, financial institutions require detailed proof of expenditures at each construction stage. Accurate cost tracking is essential to maintain your project’s smooth progression and uphold your relationship with the bank. Poor tracking can disrupt your entire project, making an investment in comprehensive construction tracking software essential. BenchMarx provides free tools to track labor, equipment, and materials expenses efficiently, ensuring all your project costs are easily accessible. No fees, no trial periods.
Interest Rate: The US prime interest rate can be viewed here.
Construction Stages: Banks will deliver funding in installments, based on what stage the project is in. Our calculator is pre-filled with the industry average percentage of funding for each stage.
Monthly Interest Only Payment: This is the amount your business will be expected to pay on a monthly basis in interest, based on the total amount of funding that has been released. As the project progresses and more funding is released, this payment will increase until construction has finished. After completion the total loan balance gets rolled into a traditional mortgage
Interest Rate: The US prime interest rate can be viewed here.
Construction Stages: Banks will deliver funding in installments, based on what stage the project is in. Our calculator is pre-filled with the industry average percentage of funding for each stage.
Monthly Interest Only Payment: This is the amount your business will be expected to pay on a monthly basis in interest, based on the total amount of funding that has been released. As the project progresses and more funding is released, this payment will increase until construction has finished. After completion the total loan balance gets rolled into a traditional mortgage
Draw Scheduling: A draw schedule specifies key construction milestones that must be reached to trigger payment releases. The number of stages varies depending on the specific loan, but typically includes 4-6 stages from completion of the foundation to achieving substantial completion.
Stage 1 - Excavation and foundation: During the excavation and foundation stage of construction, the site is cleared and dug out to the required depth, followed by the construction of the building's foundation, which involves pouring concrete and setting the footings that will support the structure.
Stage 2 -Roof is on, building is weather-protected: write a sentence describing what happens during the excavation and foundation stage of construction
Stage 3 - Plumbing, wiring, drywall, furnace, exterior cladding: The installation of plumbing and electrical systems takes place, followed by the installation of drywall and the furnace, and finally, the application of exterior cladding to protect and finish the building's exterior.
Stage 4 - Kitchen, bathroom, doors hung: Interior and exterior finishes are applied, which includes tasks such as installing fixtures, painting, flooring, cabinetry, and other final touches that complete the aesthetic and functional aspects of the building.
Stage 5 - Ready for occupancy, exterior work completed: Final inspections and walkthroughs are conducted to ensure everything meets code requirements and quality standards, addressing any remaining issues before the project is deemed complete and ready for occupancy.
Total Interest Payments: The cumulative amount of interest to be paid throughout the construction process
Total Loan Balance: The total expected loan value before interest, including the cost of land and cost of construction.
Total Loan Amount + Interest: The total expected cost of construction, including interest
Land Purchase Loans: Undeveloped bare land, partially developed land, serviced lots, unserviced lots, single lots, multiple lots.
Site Development Loans: Landscaping, roads, sewers, and other infrastructure.
Building Construction Loans: Home renovation, building addition and new construction for residential or commercial applications.
Construction Bridge Loans: Covers funding shortfalls near the end of a project unmet by the building construction loan.
Condo Inventory Loans: Provides additional capital after construction to cash flow the project until condo registration is received.
Long Term Take Out Loans: Long term mortgages that payout construction loans once an occupancy permit is received.
Mezzanine Loan: Quazi form of equity financing secured by the project and utilized to cover off the equity requirements of the senior construction loan lender
Using a construction loan calculator allows you to accurately estimate your monthly payments and total project costs by inputting key financial parameters. This precision helps ensure you have a clear understanding of your budget from the outset, and provides confidence when bidding.
A construction loan calculator helps you determine the exact amount of financing you need, preventing underfunding or over-borrowing. This ensures that your project remains financially viable and that you can cover all necessary expenses without financial stress.
By providing a detailed financial overview, the calculator aids in maintaining smooth cash flow throughout the project. This prevents disruptions caused by unexpected financial shortfalls and allows for better financial management over the course of the project.
With accurate financial data forecasting at your fingertips, you can make more informed decisions regarding project expenditures and investments. This reduces the risk of costly mistakes and enhances the overall efficiency of your project management.
In 2024, it is crucial for construction companies to be financially informed, especially given the rising interest rates that significantly impact building costs. Higher interest rates increase borrowing expenses, making financing projects more expensive and potentially squeezing profit margins. This financial strain can lead to budget overruns and project delays if not properly managed. Additionally, the cost of materials and labor can be more volatile, further complicating budget forecasts. Therefore, staying informed about financial trends and interest rate fluctuations is essential for construction companies to make prudent decisions, secure favorable financing, and ensure the successful completion of projects within budget. Utilizing a construction loan calculator during the planning phase can be a valuable tool to alleviate these issues. It allows companies to accurately estimate borrowing costs, project total expenses, and evaluate different financing options, ensuring that they are financially prepared and can manage potential risks effectively before starting a project.
