Financing
Construction & Development
Money for new construction or a major renovation, paid out as the work gets done.
The lender releases money in stages ("draws") as an inspector confirms the work. The loan is usually interest-only and floating-rate, then replaced by a long-term loan or a sale.
A good fit when
- Ground-up hotels, apartments or commercial buildings
- Gut renovations
- You have a strong contractor and a full budget
Quick facts
| Leverage | 50 to 65% of total cost (hotels often at the low end) |
|---|---|
| Your equity | Expect to put in 35 to 50% of the cost |
| Term | 2 to 3 years, interest-only |
| Rate | Floating: banks about SOFR + 2.75 to 3.75% or prime + 1 to 1.5%; private lenders higher |
| Personal guarantee | Yes, plus completion and cost-overrun guarantees |
| Time to close | 60 to 120 days |
Typical ranges as of October 2026. Every lender and deal is different.
Watch out for
- You pay for any cost overruns yourself
- Rates float during construction
- Lenders want development experience
General information, not an offer or commitment. Star Advantage Funding is not a lender; every lender sets its own terms.