Benefits of Owner Occupied Construction Loans for Commercial Property
October 10, 2024
Investing in commercial property can fuel business growth for business owners. Whether your company wants to expand operations, upgrade facilities, or construct a new building from the ground up, securing the right financing is key.
An important financial tool for owners needing construction financing is an owner occupied construction loan. Learn how owner occupied construction loans work, the range of benefits they offer, and how Texas Gulf Bank can help your business build toward long-term success.
What Is an Owner Occupied Construction Loan?
An owner occupied construction loan is a short-term business loan designed for companies that want to build or renovate a property they will directly utilize themselves.
Owner occupied loans are designed for borrowing businesses that intend to occupy at least 51% of the space for their own use, enabling them to rent out the remaining property to tenant businesses with the intent to generate rental revenue.
These loans can be used to cover a wide range of costs, including constructing a new building from the ground up, expanding an existing property, or upgrading or remodeling warehouses, offices, or other commercial properties.
In addition, these loans may help provide a foundation for your business to thrive in several key ways:
- Control Over Your Space: Owning your own commercial property could give you the freedom to customize and expand as your business grows without worrying about lease restrictions.
- Long-Term Cost Savings: Becoming a commercial property owner can be more cost-effective than renting because you can build equity over time.
- Increased Stability: By transitioning from property renter to property owner, you’re no longer subject to rigid lease restrictions or unexpected rent increases, which may give your business greater financial stability.
- Improved Asset Portfolio: Owning commercial real estate may strengthen your company’s financial standing and add a valuable asset to your portfolio, which can be leveraged for future growth.
Owner occupied commercial properties can be a smart investment for companies that need space for their business while also providing the potential for gaining additional revenue streams and opportunities for future growth.
Owner Occupied Construction Loans Offer Significant Benefits
Choosing an owner occupied construction loan through Texas Gulf Bank provides your business with a range of important benefits.
Loans That Meet Your Specific Needs
With owner occupied construction loans, you gain the financial resources needed to achieve your business goals with a space that meets your industry and operational needs.
These types of loans can be tailored to fit your company’s specific needs. If approved for financing, you will have access to funding for specific construction projects, such as expanded office space, a large new warehouse, or a renovated shopping center to attract new customers and tenants.
Favorable Repayment Terms
Owner occupied loans are designed to make it easier for business owners to manage cash flow during the construction phase. This includes offering interest-only payments during the loan term to reduce the financial burden on borrowers.
Your business can then transition to a mini-permanent loan* for manageable monthly payments.
*NOTE: Some creditors may offer one-time-close construction loans that include a permanent mortgage, but Texas Gulf Bank’s one-time close construction loans only include a mini-permanent mortgage.
Prompt Funding
As a local bank, Texas Gulf Bank provides in-house loan reviews once all application documents are received, which may lead to prompt approvals and faster loan funding.
If approved for financing, your company may use the funds to meet construction terms and deadlines, potentially reducing the risk of delays in securing materials, equipment, and general contractor labor.
Get Started Today with Texas Gulf Bank
Texas Gulf Bank has provided exceptional lending options and banking services for over 110 years. We understand how important it can be for local businesses in the Southeast Texas Gulf Coast region to have access to financing for your business construction needs.
Working with our local commercial lenders may give you the lending flexibility and loan terms needed to enhance your operations and pursue long-term growth.
Contact Texas Gulf Bank today to learn more about how owner occupied construction loans can help support your business’s future success. Let’s build something great together!
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All loans subject to credit approval