Private Money Loans
Asset-based financing secured by the property itself, built for investors who need to move faster than conventional underwriting allows.
Learn more about Private Money LoansLoan Services
Construction & Development Financing
Ground-up and major redevelopment financing, advanced in stages against verified construction progress.
How construction & development financing work
Construction financing funds something that does not yet exist. There is no income and no finished building to value, so the lender underwrites the plan — the site, the drawings, the permits, the budget, the builder and the borrower — and advances money in stages against work actually completed and inspected.
That makes construction lending the most closely administered form of real estate finance. Draw requests, lien waivers, inspections and budget tracking are continuous obligations through the build, not formalities at closing. Projects that go well are almost always the ones where the budget was honest, the builder was capable, and the exit was planned before the first advance.
Vector Interactive Group also provides commercial development services directly, so a project can be supported on both the capital side and the delivery side where that is useful.
Potential uses
When this financing fits
- Ground-up construction of residential, multifamily, retail, office or light industrial buildings.
- Acquiring land and funding the horizontal work — grading, utilities, access and infrastructure — needed before vertical construction starts.
- Substantial redevelopment or adaptive reuse where the work goes well beyond a renovation.
- Owner-users building premises purpose-designed for their own business.
- Developers phasing a project, where completed phases help support the next.
- Completing a stalled project where the original financing has fallen away.
Before you borrow
Borrower considerations
Budget realistically and carry a genuine contingency
Construction budgets are stress-tested closely, and an optimistic one is a liability rather than an advantage. Materials pricing, labour availability and site conditions all move. A contingency that is actually sized for the project is a sign of competence, not weakness.
The builder is part of the underwrite
The contractor's licensing, insurance, financial standing and record on comparable projects are reviewed alongside your own. The contract between you and the builder — fixed price or cost-plus, retainage, change-order process, completion dates — directly affects how the loan is structured.
Entitlements and permits before money
Zoning, site plan approval, permits and utility availability are generally expected to be in hand or clearly in prospect before construction funds advance. Permitting timelines vary widely between Florida jurisdictions and are a frequent source of delay. Investigate them at the site-selection stage.
Draws, inspections and lien waivers set the rhythm
Funds are released against inspected progress, supported by lien waivers from contractors and suppliers. Retainage is commonly held back until completion. Understand the paperwork cycle before you start, and make sure your builder understands it too — most draw delays are documentation delays.
Interest accrues while nothing is earning
A construction project produces no income until it is finished and occupied. Interest during construction is a real project cost, whether paid from cash flow or from an interest reserve within the loan. Budget it across a realistic build period, including likely delay.
Plan the permanent financing from the start
A construction loan is repaid by a sale or by permanent financing on the completed building. Know which, and understand what that take-out lender will require, before the construction loan closes.
The process
What happens, step by step
Discuss the project
Site, what you intend to build, where entitlements and permits stand, your total development budget, your builder, and your intended exit.
Feasibility review
We review the budget, the programme and the projected completed value together, and tell you what the project will realistically support.
Documentation
Plans and specifications, a detailed line-item budget, the construction contract, the builder's licensing, insurance and record, entitlement and permit evidence, entity documents and evidence of your equity.
Third-party review
Valuation on an as-completed basis, a construction cost review, and environmental, survey and title work as required by the site.
Terms and closing
Written terms set out the advance structure, the draw and inspection process, retainage, any interest reserve, the term and all costs.
Draw administration
Through construction, draws are requested against completed work, inspected, supported by lien waivers and funded.
Completion and take-out
On certificate of occupancy the project moves to its exit — sale, or permanent financing on the finished asset.
Questions
Construction & Development Financing FAQs
Can I finance the land purchase and the construction together?
Combined structures covering land acquisition and construction exist, though land on its own is harder to finance than a shovel-ready project because undeveloped land produces no income and has a narrower resale market. Where entitlements and permits are in place, the project is substantially easier to finance than raw, unentitled land. Talk to us before you buy the site, not after.
How much of my own capital do I need in a construction deal?
Construction lending requires meaningful borrower equity, and more of it than a purchase loan on an existing building, because the lender is funding a plan rather than an asset. Land you already own at a favourable basis often counts toward your contribution. The exact requirement depends on the project, your experience and the strength of the exit — we will tell you where your project stands.
What is retainage and why is it held?
Retainage is a percentage of each draw held back until the work is complete and accepted, protecting against defects and unfinished items. It is standard practice in construction and it affects your contractor's cash flow as much as yours, so make sure the retainage terms in your construction contract align with those in your loan. Mismatches between the two cause real friction on site.
What happens if construction runs over schedule?
Overruns are common enough that it is worth planning for them rather than hoping. Raise a slipping schedule with the lender early. Where a project is progressing and simply needs more time, an extension is often available for a fee; where the budget is also exhausted, additional equity may be required. The earlier the conversation happens, the more options exist.
Do I need permits in hand before the loan closes?
Generally yes, or a clear and dated path to them. Lenders are reluctant to advance construction funds against a project that cannot lawfully be built. Permitting timelines differ substantially between Florida counties and municipalities, and that variation should be investigated when you are choosing the site rather than after you have closed on it.
Can Vector handle the development work as well as the financing?
Vector Interactive Group offers commercial development services, so for some projects it is possible to engage us on the delivery side alongside the financing. Whether that is appropriate depends entirely on your project and how you prefer to structure your team — the two are separate engagements, and taking financing from us does not require taking development services from us, or the reverse.
Next steps
Other financing that may fit
Many projects use more than one of these in sequence — a short-term loan to acquire and improve, then longer-term financing to hold.
Bridge Loans
Short-term financing that covers the gap between where a property is today and the permanent financing or sale that pays the loan off.
Learn more about Bridge LoansFix-and-Flip Financing
Purchase and renovation capital in a single facility, with construction funds released in stages as the work is completed.
Learn more about Fix-and-Flip FinancingRental Property Financing
Longer-term financing for income-producing residential property, underwritten primarily on what the asset earns.
Learn more about Rental Property FinancingCommercial Real Estate Loans
Financing for income-producing and owner-occupied commercial property, underwritten on the asset, its tenants and its cash flow.
Learn more about Commercial Real Estate LoansTalk to us about your deal
Tell us the property, the plan and the timeline. We will tell you honestly whether we can help and what the realistic next step is.