What Do Banks Like To See When Asking For A Commercial Construction Loan?

What Do Banks Like To See When Asking For A Commercial Construction Loan?


What do banks like to see when asking for a commercial construction loan?


If you’re planning to build a commercial property or undertake a major renovation project, you’ll likely need to secure financing through a commercial construction loan. These loans are specifically designed to cover the costs associated with commercial building projects and require a different set of documentation and requirements than a traditional business loan.

Here are some of the key factors that banks typically look for when considering a commercial construction loan application:

  1. A strong business plan: Banks will want to see a detailed business plan that outlines your project’s scope, including blueprints, architectural drawings, permits, contractor bids, and timelines. This plan should also include a detailed breakdown of the costs involved in the project, as well as an estimate of the property’s value upon completion.
  2. Strong credit history: As with any loan application, banks will want to see a solid credit history demonstrating your ability to make timely payments and manage debt responsibly. A high credit score and a low debt-to-income ratio can help increase your chances of being approved for a commercial construction loan.
  3. Adequate collateral: Commercial construction loans are typically considered riskier than traditional business loans, so banks may require additional collateral to secure the loan. This could include a lien on the property or other assets, such as a vehicle or investment account.
  4. Sufficient cash reserves: Banks will also want to see that you have enough cash reserves to cover unexpected expenses that may arise during the construction process. This could include things like delays in construction, unexpected material costs, or changes to the scope of the project.
  5. Experienced contractor: Banks will want to see that you’re working with an experienced and reputable contractor who has a track record of successfully completing similar projects. They typically require that the contractor be licensed and insured. Completing schematic drawings and understanding the actual construction cost can save time and additional questions from the bank’s underwriters. These documents should be included with your loan application.
  6. Proven track record: If you’re an established business owner, banks will want to see a proven track record of successful projects and profitability. This can help assure the lender that you have the experience and financial stability to manage a large-scale construction project.
  7. Projected cash flow: Banks will want to see that the property will generate sufficient cash flow to cover loan payments and operating expenses once the construction is complete. This could include projections of future rental income, sales revenue, or other revenue streams.

Securing a commercial construction loan requires a thorough and detailed application process. By working with a knowledgeable lender and providing all the necessary documentation and requirements, you can increase your chances of being approved for a commercial construction loan and successfully completing your building or renovation project.

Ancon Construction would love to help answer your commercial construction loan questions and learn more about your vision. A 100% Employee-Owned True Design-Build Construction firm since 1975. 

Let’s get your project started…together.

Learn how Ancon Construction’s True Design-Build process provides risk mitigation

Learn how Ancon Construction’s True Design-Build process provides risk mitigation


Let’s start with the basics

What exactly is Design Build? Design-Build is a project delivery method that combines the design and construction phases of a project into a single contract. This method has gained popularity in recent years due to its ability to provide risk mitigation for project owners.

In general, the Design-Build approach is different from traditional construction delivery methods, such as Design-Bid-Build, where the owner hires a designer and a contractor separately. With Design-Build, the owner hires a single team that includes both the designer and the contractor. This team works together from the beginning of the project to the end, which ensures that everyone is on the same page, and the project goals are aligned.

In this blog post, we will explore how Ancon Construction’s True Design-Build delivery method provides risk mitigation and the benefits it offers.

Ancon Construction is a 100% employee-owned company that specializes in True Design-Build construction services, making it an ideal partner for clients who want to mitigate risks and ensure the success of their projects. Ancon’s in-house team of experts includes both designers and construction professionals, who work collaboratively to provide cost-effective solutions that meet the specific needs of each client. By taking responsibility for both the design and construction phases of a project, Ancon can better identify and mitigate risks throughout the project’s lifecycle. As a result, the team is better equipped to identify and mitigate risks throughout the project’s lifecycle.

Here are some ways Ancon’s True Design-Build team provides risk mitigation:

  1. Collaboration and Communication: Ancon’s in-house Design-Build approach emphasizes collaboration and communication between the design and construction teams. By working together, we can identify potential risks and develop strategies to mitigate them. This collaborative approach can help prevent costly delays and change orders down the line.
  2. Cost and Schedule Certainty: With Ancon’s True Design-Build process, the owner receives a fixed price for the project, which helps eliminate cost overruns. Additionally, since the design and construction teams are working together, they can develop a realistic schedule that takes into account potential challenges and risks.
  3. Quality Control: Ancon’s True Design-Build team is responsible for the quality of the project from start to finish. They have a vested interest in delivering a high-quality product, which helps ensure that the project meets and often exceeds the owner’s expectations.
  4. Single Point of Contact: With Ancon’s True Design-Build process, the owner has a single point of contact for the entire project. This simplifies communication and ensures that everyone is working towards the same goals.

Ancon Construction’s True Design-Build team provides risk mitigation by fostering collaboration and communication, delivering cost and schedule certainty, ensuring quality control, and providing a single point of contact for the owner. By hiring our True Design-Build team, owners can mitigate risks and ensure that their projects are completed on time, within budget, and to the desired quality standards.

30 years of dedication and hard work

30 years of dedication and hard work

Meet Ken – 30 years of dedication and hard work

Ken is celebrating being an employee-owner at Ancon Construction for 30 years on October 25th. His journey began when he started as a laborer on the concrete crew. Prior to joining Ancon, Ken had a brief experience building furniture after coming home from the military. A year into furniture building, Ken knew the job wasn’t the right fit for him. With the economic recession in full swing, jobs were hard to come by, so he started working for a temp company. One day, when Ken was on break, he noticed Ancon Construction was across the street building a project. Ken decided he’d give them a call. Shortly after that, both he and his brother started working for Ancon Construction.

Ken’s commitment to Ancon Construction is evident in his long tenure and loyalty. He values Ancon’s commitment to its employees. Ken reflects, “Ancon is very good about caring about their people. There is no other company like our company. Ancon wants to make sure you have a future, and they do that with stock – all of us being employee-owners.”

Ken’s role has evolved over the years, transitioning from a laborer to operating heavy equipment after 15 years. Subsequently, he became a finisher and form carpenter, showcasing his adaptability. “My job has changed a lot in 30 years. And I have learned a lot of new skills. Over the years, I have learned how to operate all different kinds of equipment on the job. You can’t be afraid to learn something new and continue to adapt and take on new challenges.”

Ken also appreciates the diverse projects and locations Ancon offers, emphasizing the company’s unique qualities. He takes pride in his work. “I like to do projects the right way – I’m a perfectionist.”

There are two things Ken shared he really likes about this type of work:

  1. Each project is different. You might be pouring another footing, but it’s not the same footing you did on the last project.
  2. You are in a different area and a different climate.

Ken said his most memorable project was the Ross Laboratories (formally Abbott) built in Michigan back in the early 90’s. It was a huge project, and he remembers how bitterly cold and snowy that winter was. The project was long, work hours were long, and the project involved a lot of concrete work.

Ken’s 30-year journey at Ancon Construction reflects his dedication, adaptability, and appreciation for the company’s values and opportunities for its employees.

Thank you, Ken, for 30 years of being a dedicated, hard-working Employee-Owner!

From Steel Laborer to Superintendent

From Steel Laborer to Superintendent

From Steel Laborer to Superintendent: Justin’s 24-Year Success Story at Ancon Construction

Justin joined Ancon Construction in March 1999, shortly after graduating from Penn High School. His introduction into the construction industry came through a friend who worked on Ancon’s steel crew at the time. Intrigued by the opportunity, he decided to give it a try, despite having no prior experience in construction.

Lloyd Yoder, a superintendent for the steel crew at that time, recognized Justin’s potential and hired him as a steel laborer. Initially, Justin’s responsibilities included tasks such as walking purlins and setting steel. As he gained experience and honed his skills, he progressed within the company. Llyod Yoder shared, “Justin was always willing to do whatever task needed to be done with a positive attitude. He always retained what worked and what didn’t work so well with the assortment of tasks.”

In 2011, Justin became a foreman and later advanced to the position of superintendent in 2014.

As a superintendent, Justin had the opportunity to take full responsibility for his first project, and it was a significant milestone in his career. The project was a warehouse addition for Indratech, and Justin managed it from the ground up. Working closely with Doug VonGunten, this experience left a profound impact on Justin and fueled his passion for construction.

Throughout his career at Ancon, Justin has had the opportunity to work on various memorable projects. Some noteworthy examples include the Ethos Science Center, the construction of Bethel Softball Field, the installation of a carousel at the Potawatomi Zoo, and even welding work at the South Bend Cubs’ performance center. He appreciates the unique challenges and diverse settings each project brings.

Justin emphasizes the importance of continuous learning and personal growth in the ever-evolving construction industry. With each job being different from the last, he strives to learn from previous experiences and apply those lessons to future projects. He finds fulfillment in seeing the construction process through to the end and enjoys the fact that every year brings new opportunities and new challenges.

When asked for advice to those starting a career in construction, Justin highlights the value of learning from those around you. He shared, “Start learning as much as you can. Learn from the guys around you. Learn about construction from the ground up. Work with the carpenters, concrete crew, steelwork, etc. Learn a bit of everything – this makes you more valuable to you and the company. If you can challenge yourself to do all of those things, you will have a better understanding of construction and you’ll be more valuable to the company because you can do anything at that point.”

Justin also appreciates Ancon Construction’s commitment to employee development and safety. He acknowledges the company’s support in providing opportunities for advancement and education. Whether it involves going to school or participating in training courses offered by organizations like ABC (Associated Builders and Contractors). “Ancon is here to help you advance and learn new things. They are willing to put that investment in you if you are willing to challenge yourself in doing it.”

Justin’s employment story at Ancon Construction is one of long-term commitment, personal growth, and a passion for construction. Over the span of 24 years, he has progressed from a steel laborer to a superintendent, taking on diverse projects and embracing the ever-changing nature of the industry.

Building a Career in Construction

Building a Career in Construction

Building a Career in Construction: Paul’s Journey at Ancon Construction


Paul, a 27-year-old construction enthusiast, found his calling at Ancon Construction, following in his brother’s footsteps. Initially working at a factory and feeling dissatisfied, Paul took the leap and joined Ancon’s carpentry crew. Little did he know that this decision would shape his future in unforeseen ways.

While attending college briefly, Paul realized that the traditional academic path was not for him. His passion lay in hands-on work and building things, which he had always enjoyed, even during his summer construction jobs. This innate talent and enthusiasm paved the way for his transition into construction as a full-time career.

Paul started his journey at Ancon as a carpenter, honing his skills and expanding his knowledge for the next three to four years. During slower periods, he willingly lent a hand on the concrete crew, relishing the variety and diversity of tasks. This flexibility showcased his adaptability and commitment to contributing in any way possible.

Recognizing Paul’s potential, the team at Ancon encouraged him to grow further, and he eventually transitioned into the role of warehouse manager, and superintendent. These promotions not only demonstrated his colleagues’ trust and belief in him but also provided a unique opportunity to broaden his horizons and take on new responsibilities.

One of Paul’s most recent notable experiences was serving as the superintendent for the Goshen Apartments project, known as Copperleaf Cove. This venture offered him a wealth of insights into the complexities of construction management, including scheduling and overseeing a team of subcontractors. It was a valuable learning experience that exposed him to the behind-the-scenes operations of a project.

Throughout Paul’s 27 years with Ancon Construction, he has relished the supportive and collaborative work environment. He emphasizes the strong sense of camaraderie and teamwork within the company, which he believes is essential for personal and professional growth. Paul acknowledges that such an atmosphere is rare to find and cherishes the benefits that come with it.

Two projects have held a special place in Paul’s heart: The Red Panda project and the construction of a carousel at the Potawatomi Zoo. “The opportunity to build a carousel was a remarkable experience,” shares Paul. He delights in his grandkids’ excitement when they proudly exclaim, “Grandpa built this for me!” These projects not only showcase his craftsmanship but also provide him with lasting memories.

What keeps Paul motivated after all these years? He attributes it to the people he works with. Having had experiences in other places, he recognizes the rarity of finding individuals who are genuinely dedicated and passionate about their work. At Ancon, the employee-owners take pride in their craftsmanship, delivering high-quality results and fostering a positive work environment.

For those considering a career in construction, Paul offers valuable advice: “Pay attention to your elders and learn from experienced professionals. Being prepared and open to new challenges is crucial. Ancon Construction, a non-union company, values continuous learning and encourages employees to acquire new skills—a recipe for success in the industry.”

Paul’s journey at Ancon Construction serves as an inspiration to aspiring construction professionals. From his humble beginnings as a carpenter to his role as a warehouse manager, Paul’s story highlights the importance of seizing opportunities.