Commercial Loan about to mature with bank

Member since 2020 · 3 posts · 1 vote

I have a commercial loan and already extended it . It matures in a few weeks and the work has been lagging due to permits and the bank not making the draws in the amount I needed. I want to know what advice is there so I can either get out of this loan or ask for another extension.... what would you suggest ?

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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
11mo
Construction lenders customarily only release funds for completed work and usually want to see permits in addition to completed work to make draws. If you’re asking for draw funds and the work hasn’t been completed or there’s issues with permits that’s going to be problematic.
It’s going to be costlier to refinance into a new construction loan between title costs, origination fees, appraisal etc. compared to paying an extension fee. Construction lenders don’t love getting involved in projects that were already started. This all points to extending.
Are the permit issues resolved and are you only asking for money for work that was completed? If those issues are still lingering that has to be your priority. Lender will be more cooperative and willing to extend if those issues are resolved.
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- Ray Petteway
  OP
  Member since 2020 · 3 posts · 1 vote
  11mo
  @Stuart Udis ok , it's the permits and the inspections. For our electrical one the inspection was filed and it's was a month before they came out we inquired about it and they said we had to expedite it and pay additional fees. I also had to switch my GC and now my Plumber . I got the HVAV person on board but these are my dilemmas I ran Into.
  
  Chris, my loan is a Commercial construction loan.
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
11mo
Quote from @Ray Petteway:

I have a commercial loan and already extended it . It matures in a few weeks and the work has been lagging due to permits and the bank not making the draws in the amount I needed. I want to know what advice is there so I can either get out of this loan or ask for another extension.... what would you suggest ?

What type of property is it? you could get a bridge loan for 6-12 months untilyou complete the work. We need more info in order to provide better reply/feedback
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- Ray Petteway
  OP
  Member since 2020 · 3 posts · 1 vote
  11mo
  @Chris Seveney Commercial Construction loan.
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Josh C.Pro Member
Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
11mo
Banks around me are happy to sign extensions. If you’ve been paying on time and making progress on your build why wouldn’t they? Just have an honest conversation with them. But don’t sound desperate and ask for 3-6 months more than you think so this doesn’t happen a second time.
This will be 100x easier than starting from scratch with a new bank and new appraisals and new documents.
Good luck.
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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
11mo
OP are you a good customer? Are they your partner? Have you been giving them monthly updates? Have you been keeping up with your GC weekly?
Get the above straightened out if needed. Lenders on commercial want to know you have a solid track record in project management.

They don’t want to own the property so they will work with you. But don’t wait to refi or extend. That is just another sign of poor project management.

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Shafi Noss
Lender · Nationwide · Member since 2018 · 571 posts · 310 votes
11mo
What do you mean by they are not making draws in the amount that you needed?
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