As a builder, securing financing for spec construction projects can be challenging, especially when banks become more conservative in their lending practices. In this article, we'll explore some financing options available to builders in Northern California who may be struggling to obtain financing from traditional banks.

Private Mortgage Funds

One option available to builders is private mortgage funds. Private mortgage funds offer quick and easy access to capital, with the ability to close deals in as little as two weeks. While interest rates may be slightly higher than traditional bank loans, the speed of funding can make up for the extra cost.

SBA CapLine

Another option to consider is the SBA CapLine. This is a revolving line of credit that allows builders to borrow up to five million dollars. While the application process can be time-consuming, once approved, the line of credit can be a valuable resource for ongoing projects.

Combining Financing Options

It's important to remember that builders can also combine financing options to achieve the desired funding for their projects. For example, a builder could use a private mortgage fund to secure funding for a specific project while also pursuing a CapLine for ongoing financing needs.

Working with Alternative Lenders

Finally, working with alternative lenders can be another option for builders who are struggling to obtain financing from traditional banks. Alternative lenders may have more flexibility in their lending practices, making it easier for builders to secure the funding they need.

Conclusion

As a builder, financing can be a major challenge, especially during times when traditional banks are tightening their lending practices. However, there are alternative financing options available, including private mortgage funds, SBA CapLine, and alternative lenders. By exploring these options, builders can find the funding they need to complete their spec construction projects in Northern California.