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Construction Lender Advance Rate Calculator
Construction lenders advance funds per draw milestone.
Max advance available
$8,100,000
Retention held
$900,000
Loan utilization %
0.32%
How the math works
Target advance = loan × LTV × % complete. Max = target × 90% (retention 10%).
$25M × 80% × 45% × 90% = $8.1M max advance. Retention $900k held.
EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.
Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.
Learn more about our review process on the EveryCalc methodology page.
How this calculator works
What this page estimates
This Construction Lender Advance Rate Calculator is built to give a quick, browser-based estimate for construction lender advance rate. Construction lenders advance funds per draw milestone. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.
Calculation approach
The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.
Example workflow
For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.
Practical checks
- Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
- Run a low, base, and high case when the inputs are estimates.
- Check the related calculators below when the next decision depends on a different assumption.
How to interpret the construction lender advance rate result
Best use
Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.
Cross-check
Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.
Watch for
Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.
This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.
Before relying on this construction lender advance rate estimate
Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.
Confirm source numbers
Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.
Separate cash flow from total cost
A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.
Run conservative cases
Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.
Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.
How to Use
- Enter total construction loan.
- Enter current % complete.
- Enter lender LTV %.
- Enter borrower equity already in.
- Read max available advance.
Frequently Asked Questions
Advance rate?
Typical: 75-85% of hard costs as incurred. Lender holds 10% retention. Borrower's equity funded first (then each draw). At 50% complete, typical 50% of loan funded. Lender inspection required for each draw.
LTC vs LTV?
LTC (Loan to Cost): 70-80% typical. Project-specific. LTV (Loan to Value): based on projected stabilized value; 60-70% typical. Takes the lower. Post-stabilization, roll to permanent at LTV.
Equity-first?
Borrower equity funded first (usually 25-30% of total project). Then loan advances. Lender inspects before each draw. Delayed draws common in first-time developers. Institutional developers get faster draws.
How does this interact with the rest of the capital stack?
Each tier of the stack affects the next. Senior debt constrains LTC and DSCR. Mezz and pref consume equity spread. Interest rate hedges protect DSCR but cost premium. Always model the full stack holistically — optimizing one tier alone often degrades another. Institutional underwriters run three or four scenarios across the stack before committing capital.
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