Skip to Content

Construction Loans

Did you know TFNB construction loans funded the revitalization of Downtown Waco?

TFNB can also help your business with construction loans. A commercial construction loan can help your business build, remodel, or expand. Learn more by talking with a member of our team:

What is a commercial construction loan?

Commercial construction loans help businesses finance construction and renovation projects. Like a home construction loan, they act as short-term real estate loans. Use funds to pay for costs associated with building and construction, including:

  • Construction, architecture, or design labor
  • Materials and finishings
  • Buying land
  • Other related costs

How do construction loans differ from other traditional loans?

Most commercial loans pay out the full amount upfront. Businesses then pay back the principal and accumulated interest in small, monthly installments. Construction loans work a little differently.

Construction loans operate on a draw schedule. The schedule determines when the lender pays out parts of the loan. This is usually based on reaching project milestones.

For example, in new building construction, the first draw is likely for the sale and development of empty land. The next draw could be for pouring the foundation. Another draw could happen during framing. The process continues until the project is complete.

Before each draw, an inspector may visit the construction site. They confirm the work is completed and the next draw is ready to be sent.

With a commercial construction loan, interest is only paid on funds received. For example, if the total project cost is $700,000 and the loanee has only taken out $250,000, interest is only paid of the $250,000.

Additionally, interest is only paid when the lender distributes the full amount. Then the loanee can either:

  • Pay off the principal in one lump sum at the end of the finished construction.


  • Roll the lump sum of the construction loan into a commercial mortgage. With a commercial real estate loan, the lump sum turns into smaller monthly payments. Learn more about commercial mortgages here.

How do construction loans differ from other traditional loans?

At TFNB, we care about the success of local businesses. We support construction and revitalization efforts in Waco and McGregor because we live and work here too.

If you are looking to build or renovate in Central Texas, we can help you secure the funds you need. Our commercial lending team will be with you each step of the way. You’ll receive personal, knowledgeable support from local bankers who understand the Waco area.

If you’re ready to take the next step in building, expanding, or renovating your business, reach out to us! We can help you find and apply for the right lending solution for your project.

What are Edge Accounts?

Construction Loans
Construction Loans
Life's Edge Checking Accounts | TFNB
Construction Loans
Construction Loans

Questions about construction loans? We can help!

Fill out the form below and a member of our team will reach out to you.