Commercial Real Estate Construction Loans

Turn your development vision into a functioning asset with AVANA's commercial construction loans. We provide draw-based, interest-only financing from $5M to $30M — tailored to your project budget, timeline, and exit strategy.

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SBA 504 Loans
Built for Growth

Fixed-Rate, High LTV (Up to 90%), Long-Term CRE Loans for Owner-Occupied Properties

Backed by $5B+ in SBA lending expertise. Fast, transparent closings tailored for small businesses and brokers.

Apply For a LoanProduct Sheet

Ground-Up, Expansion & Major Renovation Financing

Construction financing covers the full cost of building or significantly improving commercial real estate. Unlike a term loan that funds at closing, construction loans disburse in stages — called draws — tied to verified milestones as workis completed and inspected. That structure keeps costs managed and ensures capital is deployed in step with real project progress.
AVANA's construction lending programs are designed for experienced sponsors who need an institutional-grade partner from pre-construction through stabilization. Through our strategic partnerships, we provide flexible draw-based financing structured around your project type, brand requirements, and planned exit —whether that's an SBA 504 take-out, a conventional term loan, or a sale at stabilization.
AVANA borrowers use construction financing to:
  • Finance ground-up builds across hospitality, industrial, medical office, and specialty commercial assets
  • Fund major renovations or full gut-rehabs ahead of stabilization and permanent financing
  • Complete brand conversions or flag changes requiring significant capital investment
  • Expand existing facilities — additional bays, floors, or annexed structures
  • Bridge construction completion to a conventional or SBA 504 permanent take-out

Draw-based, interest-only structures

Borrow only as you build. Interest is charged on drawn funds only — not the full committed amount — keeping your carry cost low while construction progresses.

Speed & certainty of
execution

Soft quote within 1 business day. LOI typically within 3–5 days of complete pre-qualification materials. No drawn-out maybe that stalls your start date.

Flexible terms up
to 3 years

Interest-only terms with annual extension options to accommodateconstruction delays, slower lease-up, or pre-opening ramp periods.

Structured for your
take-out

Loans are designed from day one around your exit — SBA 504, conventional term, or sale — so there are no structural surprises when construction completes.
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Diversify portfolios
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Expand lending programs beyond their communities
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Mitigate concentration risk
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Improve Loan-to-share ratio

Construction Loans Rates and Terms

AVANA offers construction financing through two programs with distinct pricing, structures, and eligible project types. Both are interest-only with draw-based disbursements. All rates are indicative — contact us for a project-specific quote.

Interest rates

1-Month Term SOFR
+ 4.50%–7.00%

AVANA Oaktree Private Credit Partnership

1-Month Term SOFR + 4.00%. Floor of 8.00%

AVANA-IHG Co-Lending Construction Program

LTV

Up to 75% Total

Based on up to 75% of “as-is” value or 70% of “as-stabilized” value

Loan amount

$5MM - $30MM

Designed to fund mid- to large-scale commercial real estate projects

Loan terms

Up to 3 Years

Interest-only loans with annual extension options

Uses of proceeds

Construction

Financing available for hospitality construction projects

Download AVANA Oaktree product sheetDownload AVANA IHG product sheet

Property Types We Finance

AVANA's construction lending programs cover a range of commercial asset classes — with particular depth in hospitality, industrial, and specialty assets requiring experienced institutional partners.

Franchise Hotels →

Ground-up builds, brand conversions, and major renovations for nationally branded hotel properties — including avid Hotels, Atwell Suites, Staybridge Suites, Candlewood Suites, EVEN Hotels, and Holiday Inn. Includes specialized co-lending programs aligned to specific brand standards and ramp-up timelines.

Do You Qualify for a Construction Loan?

AVANA's construction programs are designed for experienced sponsors with a validated business plan, a credible path to stabilization, and strong collateral. Key criteria:
  • Loan size: $5M–$30M
  • Sponsor experience: 5+ years in commercial real estate or the relevant industry
  • Credit: 680+ FICO
  • Leverage: up to 75% of as-is value, or 70% of as-stabilized value
  • Exit strategy: documented SBA 504, conventional term loan, or sale at stabilization
  • Collateral: senior secured first mortgage on the subject property
  • Full-recourse personal guaranty from principals with controlling interest

Two Specialized Programs for Two Types of Projects

The AVANA Oaktree Private Credit Partnership delivers institutional-grade construction and bridge financing to experienced CRE sponsors. Backed by Oaktree Capital Management — one of the world's leading alternative investment managers with over $190B AUM — this program gives borrowers access to $5M–$30M in flexible construction capital with competitive SOFR-based pricing, draws tied to milestones, and up to 3-year interest-only terms. Designed for sponsors who've outgrown local bank capacity and need an institutional partner who can execute.
The AVANA–IHG Co-Lending Construction Program is a purpose-built lending solution for developers building or converting to IHG-branded hotels. The program is structured around IHG brand standards and real-world hotel ramp-up realities —with rates starting at 1-Month SOFR + 4.00% (floor of 8.00%), loan amounts from $5M to $30M, and terms up to 3 years with annual extensions. Senior first-mortgage security, up to 75% as-is or 70% as-stabilized LTV. Available for projects in the top 200 US markets.

A Streamlined Process

We make financing simple, transparent, and fast from application to funding

Submit Application

Submit your application with pre-qualification documents. We’ll review and issue a soft quote within 1 business day

Review

We review initial documents and confirm loan structure and key terms. If the deal meets criteria, we issue a Letter of Intent with proposed terms

Approval & Terms

We complete underwriting and order third-party reports as needed. Credit team issues final approval when complete (timing can vary)

Closing & Funding

We prepare final loan documents, open escrow, and coordinate closing. Funds are released once closing requirements are met

Explore Process
Apply For a Loan

Proven Success Stories

We’ve helped businesses across industries

Two Industrial Flex Buildings
Featured
October 24, 2024

Two Industrial Flex Buildings

Loan Purpose:

Acquisition

Asset Class:

Industrial

Loan Amount:

1,225,000

Nashville Hotel Deal
Featured
November 1, 2024

Nashville Hotel Deal

Loan Purpose:

Construction

Asset Class:

Hotel

Loan Amount:

3,021,628

Frequently asked questions

Find answers to common questions
What types of construction projects do you finance?
We fund ground-up builds, expansions, and major renovations for experienced sponsors across hospitality (including branded hotels), industrial, warehouse, medical office, self-storage, and select specialty commercial assets. Each project should have a clear business plan, a validated construction budget, a confirmed general contractor, and a defined route to stabilization — either a sale, SBA 504 take-out, or conventional term loan refinance.
What are the typical loan amounts, leverage, terms, and pricing?
Construction loans range from $5M to $30M with leverage up to 75% of as-is value or 70% of as-stabilized value. Terms are up to 3 years, structured as interest-only, with annual extension options. Pricing is floating over 1-Month SOFR. The AVANA Oaktree program rates range from SOFR + 4.50%–7.00%; the AVANA–IHG program starts at SOFR + 4.00% with a floor of 8.00%. An origination fee and exit fee apply — contact us for project-specific terms.
How long does it take to close, and how do construction draws work?
From a signed LOI, expect to close within approximately 45 days. Timeline is primarily driven by third-party reports — appraisal, environmental, and property condition assessment. After closing, proceeds are disbursed in stages called draws, tied to verified construction milestones supported by inspection reports and lien waivers from contractors and subcontractors. Sponsors with permits in hand, a confirmed GC, and organized pre-closing documentation typically move faster.
Can construction financing pair with SBA or permanent debt?
Yes —and for most sponsors this is the intended structure. Many borrowers arrange their permanent take-out (SBA 504 or conventional term loan) before construction begins and use the construction loan as interim financing. We can align the construction loan term, extension provisions, and interest reservesizing to your expected permanent financing timeline — reducing structural friction at maturity and avoiding duplicate diligence where possible.
How does the AVANA Oaktree Private Credit Partnership help with construction deals?
The AVANA Oaktree Private Credit Partnership provides institutional-grade construction and bridge financing from $5M to $30M to experienced CRE sponsors across multiple asset classes. Loans are interest-only for up to 3 years withannual extensions, priced at 1-Month SOFR + 4.50%–7.00% depending on asset type and risk profile. Oaktree Capital Management's private credit platform provides capital depth and institutional structuring, while AVANA brings sector expertise and speed of execution.
What are the terms for the AVANA–IHG Co-Lending Construction Program?
The AVANA–IHG Co-Lending Construction Program supports IHG-branded hotel construction with loan amounts from $5M to $30M, terms up to 3 years plus annual extensions, and rates starting at 1-Month SOFR + 4.00% with a floor of8.00%. Loans are interest-only, secured by a senior first mortgage, with leverage up to 75% of as-is value or 70% of as-stabilized value. An origination fee of 2.0% and exit fee of 1.0% apply. Minimum 680 FICO, 5+ years sponsor experience, and top 200 US market location required.

Readyto Build? Let's Start Your Loan.

Submit a short pre-qualification and our construction lending team will respond within 1 business day with a soft quote. Tell us the asset class, location, total project cost, and your exit plan — that's all we need to get started.
Apply for a loanSchedule a call ↗

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Our Team

About Sanat Patel

As Chief Lending Officer at AVANA Companies and Chair of the Board at AVANA Bank, Sanat Patel brings more than three decades of experience in financial services, private credit and commercial banking, with a proven track record in loan structuring, risk management, and balance sheet growth. Sanat has led strategic initiatives that connect institutional capital with entrepreneurial ambition, supporting the growth of businesses, and  owners engaged in commercial real estate across the U.S. He has built and scaled lending platforms in partnership with banks and credit unions, developing tailored financial solutions that drive job creation and foster inclusive economic development.

Sanat Patel
Chief Lending Officer

Our Team

About Christyna Lane

As a lending participation expert in Southern California, Christyna Lane manages the direct loan placements for AVANA CUSO, a Member of the AVANA Family of Companies, with lenders like credit unions, community banks and other financial institutions while establishing and maintaining relationships for the organization.  Joining the CUSO team in 2014, she works in connection with lenders nationwide to assist them in reaching their commercial lending goals and diversifying their portfolio.

Christyna Lane
Vice President Participations