What to Ask Your Lender Before Starting a Ground-Up Project

What to Ask Your Lender Before Starting a Ground-Up Construction Project 

Financing a ground-up construction project can feel overwhelming, but the right lender can help ease the burden. Whether you’re building single-family homes, multi-unit rentals, or small-scale infill development, the lender you choose should be more than just a check writer; they should be a partner in your success. 

Here’s what you need to ask before you break ground. 

What type of projects do you fund? 

Some lenders don’t even finance ground-up builds; others, like Clout Capital, specialize in them. When talking to a potential lender, you should be prepared to dig into the details of your build. If it’s relevant to your project, ask us about: 

• Residential vs. commercial 

• Lot development vs. vertical construction 

• Required entitlements and permits 

How are construction draws structured? 

Clout Capital’s loans fund up to 100% of construction costs, but ground-up loans are usually dispersed in phases. Before you start construction, we will make sure you understand: 

• The draw schedule 

• Required inspections 

• Reimbursement timelines 

What’s the interest structure? 

Are you paying interest on the full loan amount from day one, or just on funds that have hit your account? This makes a big difference in your monthly cash flow. We’ll make sure it’s clear whether the loan is: 

• “Dutch”: You pay interest on the entire loan amount from day one. 

• “Non-Dutch”: You pay interest only on funds as they’re drawn. 

What happens if there’s a delay? 

As builders ourselves, we get it: delays happen. Materials on backorder, bad weather, and permitting timelines are all part of the process. We’ll make sure you understand: 

• How to extend your loan, and if there are any extension fees or penalties. 

• How we communicate during the project to ensure the process is smooth. 

• Flexibility on draw adjustments. 

Ground-up construction is hard enough without confusion about cash flow. At Clout Capital, we fund with speed, and we uplift our clients with real-world experience.  

If you’re ready to break ground the smart way, learn more about New Construction Loans, or schedule a call today.