--- title: Commercial Construction Loans and Raising Equity description: Do you need a commercial construction loan? Is the bank requiring that you come up with more equity? image: https://info.c-loans.com/hubfs/Apartment%20Construction.jpg --- [![c-loans-logo-2025](https://info.c-loans.com/hs-fs/hubfs/images/c-loans-logo-2025.png?width=183&height=86&name=c-loans-logo-2025.png)](https://c-loans.com) [Terms of Use](https://www.c-loans.com/terms-of-use) | [Disclaimer](https://www.c-loans.com/disclaimer) | [Blog](https://info.c-loans.com/) # Commercial Loans and Fun Blog ## [Commercial Construction Loans and Raising Equity](https://info.c-loans.com/commercial-construction-loans-and-raising-equity) Posted by [George Blackburne](https://info.c-loans.com/author/george-blackburne) on Sat, Jun 9, 2018 - [Tweet](https://twitter.com/share) ![Apartment Construction](https://info.c-loans.com/hs-fs/hubfs/Apartment%20Construction.jpg?width=387&name=Apartment%20Construction.jpg)Ninety percent of all commercial construction loans that are turned down are rejected because the developer lacked sufficient equity in the deal.  In the parlance of commercial real estate finance, he didn't have enough ***skin in the game***. --- **Need Equity Dollars?** Are you a real estate developer?  Are you trying to build a project right now?  My name is George Blackburne III, and I'm the attorney that owns both C-Loans.com and CommercialMortgage.com.  I also own Blackburne & Sons, the $50 million hard money commercal mortgage company that I founded almost *forty* years ago. If you need help raising equity dollars, I am available for consultation at the rate of $375 per hour, with a minimum of only $100.  I consult three times per week at precisely 1:30 p.m. ET on Mondays, Thursdays, and Fridays.  Please call my son, [Tom Blackburne](mailto:tommy@blackburne.com), at 574-210-6686 to set up a consultation ---   [![Apply For a Commercial Construction Loan](https://no-cache.hubspot.com/cta/default/37671/3e722a73-7984-4530-9c5e-454c4e9e584f.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/3e722a73-7984-4530-9c5e-454c4e9e584f) ![coyote-1](https://info.c-loans.com/hs-fs/hubfs/coyote-1.jpg?width=471&name=coyote-1.jpg)   Commercial construction loans can be pretty risky.  You have the risk of cost overruns.  About twenty-five years ago I was financing a deal, and the lumber costs soared by 40% in a single week. You have the risk that the workers will go out on strike.  Labor is getting harder and harder to find these days, and I predict that you will see more and more labor slowdowns, as workers demand higher pay. You also have the political risk that some government employee could put some last minute kibosh on the project.  Think of that poor developer who discovered that he was excavating into an ancient Indian burial ground; or perhaps the City Council increases the parking requirement at the last moment.  Then there is construction risk.  Imagine a crane falling or dropping an expensive beam.   [![Pay Attention, Folks!  Our Investors Have Earning 9% For Almost 40 Years](https://no-cache.hubspot.com/cta/default/37671/eac5ae4d-8d67-4bf5-b1b6-7caaf90a66f5.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/eac5ae4d-8d67-4bf5-b1b6-7caaf90a66f5)   ![about-to-make-a-bad-decision-again_th](https://info.c-loans.com/hs-fs/hubfs/about-to-make-a-bad-decision-again_th.jpg?width=474&name=about-to-make-a-bad-decision-again_th.jpg)   Then you have marketing risk.  Are the condo's that are you are building going to sell at their projected sales prices?  Is your new office space going to lease at your pro forma rents?  Let's face it, a million thing can, and do, go wrong on commercial construction projects. As a result, banks are demanding a ton of equity in their construction deals.  During the go-go days before the Dot Com Meltdown, banks were making commercial construction loans of 90% loan-to-cost.  Many got slaughtered when commercial real estate collapsed by 45% after the dot-com stocks melted down.   [![Apply to 218 Different SBA Lenders  Using the Same Four-Minute Application](https://no-cache.hubspot.com/cta/default/37671/021eee15-e2fd-4518-a9ab-7d26584681f1.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/021eee15-e2fd-4518-a9ab-7d26584681f1)   ![Cha-Cha-1](https://info.c-loans.com/hs-fs/hubfs/Cha-Cha-1.jpg?width=375&name=Cha-Cha-1.jpg)   Eight years later, after the commercial real estate market recovered, banks were making commercial construction loans of 80% loan-to-cost.  Then the Subprime Mortgage Crisis struck, and banks once again got slaughtered in commercial construction lending. In the wake of the Great Recession, banks regulators really clamped down on commercial construction lending.  Loan-to-cost ratios in excess of 70% were strongly discouraged.  Requiring the developer to contribute 30% of the Total Cost of a development project is a deal killer.  Commercial construction has never recovered to pre-crash levels.   [![Apply To 93 Different USDA Lenders Six At a Time Until One Says Yes](https://no-cache.hubspot.com/cta/default/37671/b0cadc50-ab55-446c-82fa-6b3455ed45ff.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/b0cadc50-ab55-446c-82fa-6b3455ed45ff)   ![Follow-1](https://info.c-loans.com/hs-fs/hubfs/Follow-1.jpg?width=416&name=Follow-1.jpg)   The good news is that a few banks - much less than half the banks - are once again making construction loans up to 80% loan-to-cost.  This still requires that the developer contribute a whopping 20% of the total cost of the project.  The good news is that under the JOBS Act, it is much easier to raise equity dollars these days.   [![Nine-Hour Video Training Course How to Broker Commercial Loans](https://no-cache.hubspot.com/cta/default/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f)   [![Franchise financing](https://no-cache.hubspot.com/cta/default/37671/505104e3-6949-4012-9306-045d6a5913f7.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/505104e3-6949-4012-9306-045d6a5913f7)   ![what-a-few-years-makes_th](https://info.c-loans.com/hs-fs/hubfs/what-a-few-years-makes_th.jpg?width=437&name=what-a-few-years-makes_th.jpg)   --- **Need Equity Dollars?** Are you a real estate developer?  Are you trying to build a project right now?  My name is George Blackburne III, and I'm the attorney that owns both C-Loans.com and CommercialMortgage.com.  I also own Blackburne & Sons, the $50 million hard money commercal mortgage company that I founded almost *forty* years ago. If you need help raising equity dollars, I am available for consultation at the rate of $375 per hour, with a minimum of only $100.  I consult three times per week at precisely 1:30 p.m. ET on Mondays, Thursdays, and Fridays.  Please call my son, [Tom Blackburne](mailto:tommy@blackburne.com), at 574-210-6686 to set up a consultation ---   [![Submit Your Loan to 750 Commercial Lenders Using C-Loans.com.  It's Free!](https://no-cache.hubspot.com/cta/default/37671/9f0b2bed-fb9b-455d-b8be-17d8f7960a2a.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/9f0b2bed-fb9b-455d-b8be-17d8f7960a2a)   [![Apply For Preferred Equity or a Commercial Scond Mortgage](https://no-cache.hubspot.com/cta/default/37671/e756b15b-fc7d-410b-bf79-5c96d02682f3.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/e756b15b-fc7d-410b-bf79-5c96d02682f3)   ![Guess](https://info.c-loans.com/hs-fs/hubfs/Guess.jpg?width=477&name=Guess.jpg)     [![Banks and Credit Unions: Get 200 Free SBA Loan Leads](https://no-cache.hubspot.com/cta/default/37671/ac84f910-4343-4296-ac20-d048ecdbed3b.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/ac84f910-4343-4296-ac20-d048ecdbed3b)   [![Subscribe to the Commercial Loans and Fun Blog](https://no-cache.hubspot.com/cta/default/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc)     Topics: [Construction loan equity](https://info.c-loans.com/topic/construction-loan-equity) ### George Blackburne III Owner of C-Loans, Inc. ![george blackburne photo](https://info.c-loans.com/hs-fs/images/george-blackburne-photo.jpg?width=156&height=217&name=george-blackburne-photo.jpg) ### Subscribe via E-mail ### Connect with C-Loans ## [![Get the Latest Scoop on C-Loans Inc.](https://no-cache.hubspot.com/cta/default/37671/bacfb58b-143e-40d7-b126-33c182b5b90b.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/bacfb58b-143e-40d7-b126-33c182b5b90b) C-Loans.com® is sponsored by  C-Loans, Inc. — For more information, contact Tom Blackburne 555 University Ave., Suite 150, Sacramento, CA 95825 Telephone: (916) 338-3232 x 317 * Tom Blackburne in Indiana: (574) 210-6686 * Fax: (916) 338-2328 Real Estate Broker -- California Department of Real Estate -- License Number 01330173 Arizona Dept. of Financial Institutions – License Number 0909472 The Florida Mortgage Brokers License Number: 0708758 [Read our many client Success Stories](https://c-loans.com/mortgage-brokers-overview/success-stories/) » © 2025 C-Loans, Inc. 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