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Construction & Renovation Highlights
- Financing for ground-up builds and major rehab projects.
- Works for SFR, small multifamily, and select mixed-use/commercial.
- Up to 85–90% of project costs and 70–75% of completed value (case-by-case).
- Interest-only during the build phase for improved cash flow.
Navigating Construction Loans in Utah: A Guide for Business Owners
Starting or expanding a business in Utah can be an exciting and rewarding endeavor. However, one major hurdle that business owners often face is securing financing for construction projects. This is where construction loans come into play. In this blog post, we will dive into the world of construction loans in Utah, discussing what they are, who needs them, and how they can benefit businesses in the state. We will also address common mistakes business owners make and provide a real case study from a Utah-based business. So, if you are a business owner in Utah looking to take on a construction project, keep reading to learn more about construction loans and how they can help you achieve your goals.
The Story of Sarah: A Utah Business Owner’s Experience with Construction Loans
Sarah is the owner of a successful restaurant in Salt Lake City, Utah. After years of running a thriving business, she decided to expand her restaurant and open a second location in another city. Sarah had the perfect location in mind and a solid business plan in place, but she quickly realized that she would need a significant amount of financing to make her vision a reality. This is where she learned about construction loans, and with the help of GHC Funding, she was able to secure the necessary funds to bring her dream to life.
What are Construction Loans?
Construction loans are short-term loans used to finance new construction or major renovations on commercial properties. This type of financing is different from traditional business loans because the funds are paid out in stages as the construction progresses, rather than in a lump sum. Construction loans are typically repaid in full once the project is completed, with the proceeds from the sale, lease, or refinancing of the property.
Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!
⚡ Key Flexible Funding Options:
GHC Funding everages financing types that prioritize asset value and cash flow over lengthy financial history checks:
DSCR Rental Loan
- No tax returns required
- Qualify using rental income (DSCR-based)
- Fast closings ~3–4 weeks
SBA 7(a) Loan
- Lower down payments vs banks
- Long amortization improves cash flow
- Good if your business occupies 51%+
Bridge Loan
- Close quickly — move on opportunities
- Flexible underwriting
- Great for value-add or transitional assets
SBA 504 Loan
- Low fixed rates through CDC portion
- Great for construction, expansion, fixed assets
- Often lower down payment than bank loans
🌐 Learn More
For details on GHC Funding's specific products and to start an application, please visit our homepage:
Who Needs Construction Loans?
Construction loans are designed for business owners who need financing for a construction project. This may include building a new facility, expanding an existing one, or making significant renovations. Construction loans are also commonly used by developers and investors who are looking to build or renovate commercial properties for sale or lease.
Why Do Utah Businesses Benefit from Construction Loans?
Utah is a state that is experiencing significant growth, especially in its business sector. This means that there is a high demand for new and updated commercial properties. Construction loans provide a way for businesses in Utah to finance their construction projects and keep up with the growing market. They also allow businesses to customize their properties to meet their specific needs and stand out in a competitive market.
Credit Score Requirements
The credit score requirements for construction loans vary depending on the lender and the project. Generally, a credit score of 680 or higher is considered good enough to qualify for a construction loan. However, some lenders may require a credit score of 700 or above.
How Long Does Approval Take?
The approval process for construction loans can take anywhere from 30 to 60 days. This is because the lender needs to thoroughly review the project plans, budget, and financials before approving the loan. It is essential to have all the necessary documents and information ready to speed up the approval process.
3 Common Mistakes Utah Business Owners Make with Construction Loans
1. Not having a solid business plan: A business plan is crucial when seeking financing for any project. It shows the lender that you have a clear vision and a plan to make your project a success. Having a well-thought-out business plan can increase your chances of getting approved for a construction loan.
2. Not having enough funds for unexpected costs: Construction projects often come with unexpected costs that can quickly add up. It is crucial to have a contingency fund in place to cover any unforeseen expenses. Not having enough funds can cause delays and setbacks, which can ultimately affect the success of your project.
3. Not working with a reputable lender: Finding the right lender can make all the difference in your construction loan experience. It is essential to do your research and work with a reputable lender like GHC Funding, who has a track record of successfully funding construction projects in Utah.
Real Case Study: A Utah Business Secures a Construction Loan with GHC Funding
A local tech company in Sandy, Utah, was looking to expand its operations and build a new office space. They had a solid business plan and a great location, but they needed financing to bring their vision to life. The company approached GHC Funding for a construction loan, and after a thorough review of their project plans and financials, they were approved for a loan of .5 million. The construction was completed on time, and the company now has a modern, spacious office space to accommodate its growing team.
FAQs about Construction Loans in Utah
1. How much can I borrow with a construction loan?
The amount you can borrow with a construction loan depends on several factors, including the lender, your project plans, and your financials. Generally, lenders will finance up to 80% of the project’s total cost.
2. Can I use a construction loan to buy land?
Yes, you can use a construction loan to purchase land and build a new property. However, the lender will typically only finance up to 70% of the land’s value.
3. What are the interest rates for construction loans?
The interest rates for construction loans can vary depending on the lender and the project. Generally, they are higher than traditional business loans because of the higher risk involved. It is essential to discuss interest rates with your lender before signing off on a loan.
4. Can I use a construction loan to renovate my existing property?
Yes, you can use a construction loan to make significant renovations on your existing commercial property. However, the lender will likely require a detailed project plan and budget to approve the loan.
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Compare our top-rated commercial and investment property loan programs below.
- No income verification
- 30-year fixed | Interest-only available
- Great for rental properties + STR
- Fast approvals
- Working capital + business acquisition
- Up to $5M
- Low down payment
- Long-term financing
- Owner-occupied CRE
- Low fixed rates | 25-year terms
- Great for business expansion
- Refinance available
- Best for stabilized properties
- Competitive rates
- 12–25 year terms
- Lower fees than private lenders
Compare Loan Types
Find the Right Financing for Your Real Estate or Business Project
| Loan Type | Best For | Rates | Terms | Highlights | Apply |
|---|---|---|---|---|---|
| DSCR Loan | Rental properties (LTR & STR) | 5.99%+ | 30-year fixed, IO options | No income docs, fast approvals, great for investors | Check My Rate |
| Construction Loan | Ground-up, fix & build, major renovations | 8%–12% depending on scope | 12–24 months interest-only | Flexible draws, great for builders & developers | Get a Quote |
| SBA Loan | Business acquisition, working capital, CRE | Prime + spread | 10–25 years | Lowest down payments, long terms, best for business growth | See My Options |
Ready to Secure a Construction Loan for Your Utah Business?
If you are a business owner in Utah looking to take on a construction project, GHC Funding can help. Our team of experienced financial advisors has a deep understanding of the Utah market and can guide you through the process of securing a construction loan. Contact us today to learn more about our financing options and how we can help your business grow and thrive. Let’s make your construction project a success together!
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Use these trusted resources to grow and manage your small business—then connect with GHC Funding
to explore financing options tailored to your needs.
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and more—start your funding conversation today.
Helpful Small Business Resources
