Being a builder in 2025 isn’t just about swinging hammers and laying foundations. You’re also navigating a financial landscape that’s shifting under your boots. Traditional bank financing has grown harder to secure, and that’s why more and more builders are turning to private construction loans.
Now, if you’re wondering how to get your loan approved without losing time or sleep, let’s walk through it together. Think of this as a guide, but also as advice from those who’ve seen where builders stumble—and where they succeed.
Step 1: Demonstrate Builder Credibility
Every lender begins with the same question: Can this builder actually deliver?
Private lenders aren’t just backing a project; they’re backing you. To make their decision easier, have these at the ready:
- Proof of licensing, insurance, and bonding
- A portfolio of completed projects, with budgets and timelines noted
- References from past clients or lenders
- Solid company financials that show stability
Pro Tip: At the end of the day, lenders are investing in your reputation just as much as your blueprints. If you can show a history of delivering on time and within budget, you’ve already cleared one of the biggest hurdles.
Step 2: Provide a Comprehensive Project Plan
Here’s a truth many builders overlook: private lenders don’t fund buildings—they fund execution.
Your plan should be as airtight as your framing:
- A detailed construction timeline with milestones
- Blueprints, permits, and site plans
- A full cost breakdown and budget
- Signed agreements with subcontractors and suppliers
When your plan is clear and organized, you reduce risk in the lender’s eyes. And the less risk they see, the faster they move.
Step 3: Meet Private Lender Loan Requirements
Now, private lenders might be more flexible on credit history than banks, but make no mistake—they’re sticklers for project feasibility. That’s why preparing for private construction loan approval means more than just meeting the basics—it’s about showing lenders you’ve thought through every detail.
- Credit score in the 660+ range
- 25%~ equity or down payment
- Contingency reserves for overruns
- A transparent draw plan for staged funding
Meeting these upfront shows you’re serious and financially responsible. Skip this, and you’ll find yourself stuck in delays.
Step 4: Follow the Private Lender Approval Checklist
Every lender has a checklist. It’s rarely glamorous, but it’s essential—especially when it comes to private construction lending. Organized builders move through underwriting faster because lenders see less risk.
- A land settlement statement or purchase agreement (some lenders like CoFi will fund land acquisition and development with the vertical portion)
- Builder contract and detailed budget
- Proof of your credentials—license, insurance, portfolio
- Personal and business financial documents (tax returns, bank statements)
Pro Tip: Stay organized. Builders who hand over a tidy, complete package move through underwriting faster than those who scramble. Proof of liquidity is essential to get real answers and quickly.
Step 5: Prepare for Appraisals & Inspections
Private construction loans don’t hand over all the cash in one lump sum. They’re funded in “draws.” And to unlock each draw, you’ll need:
- Inspector verification of progress (CoFi makes this easy by providing its borrowers with a digital inspection camera and submission portal)
- Documentation—photos, invoices, reports
- Confirmation that funds are used as intended
It may feel like extra oversight, but think of it as a safety net — it protects both you and your lender.
Step 6: Strengthen Builder–Lender Communication
Here’s the part many builders underestimate: relationships. A strong lender relationship can make the difference between a smooth approval and a rocky one.
Keep the lines open by:
- Giving timely project updates
- Being upfront about budget changes
- Submitting draw requests quickly and accurately
- Cooperating with inspectors and underwriters
The more transparent you are, the more trust you build. And that trust pays off when you’re back for your next loan.
Position Yourself for Success
Private construction loan approval isn’t just about getting funded—it’s about proving you’re the kind of builder lenders want to partner with. Private construction loans aren’t the fallback option anymore—they’re the future of builder financing.
Ready to take your next step? Request a loan consultation today and learn how CoFi can help you secure smarter, faster private construction financing in 2025.
