Construction business funding
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Expanding your business: Budget to blueprint

Construction business funding

It is easy to let something vital slip through the cracks when you’re busy running your business and coordinating a new construction project at the same time.

Part 5 [In this blog series, you’ll learn key construction tips for an effective remodel/build-out project provided by Maxx Builders, a Texas-based, commercial general contractor and design company.]

Timeline and design

Review the following items related to your project to keep your plans moving forward.

  1. In the event of a fire or medical emergency, what would the response time for emergency services be? This is important for safety and it can also affect insurance costs.
  2. Site permitting timeline – before you can build on the site, you are required to obtain permits from the site’s city and/or county jurisdiction. Acquiring these can take up to 2-12 months or longer at times, so it is important to begin your efforts to attain them as early in the process as possible. Ensure that you have accounted for this in the project’s schedule. You will also have to pay permitting fees.
  3. Conceptual site design – with all this information in-hand and what you need from this building to maximize your business’s efficiency, you can use the following questions to begin designing your site plan.
  • Where are the building’s boundaries?
  • What area on the site is non-buildable?
  • Where and how much sq. ft. of your property will be for parking?
  • Where will be the driveways?
  • Where and how large will your sign(s) be?

Important non-construction information

Securing the funds

Be sure that you have prearranged – depending on your final decision, adequate funding for the proposed new location or build-out. You may start with your bank as a possible source for funds. Determine the steps you will have to take to finance the building or build-out.

If bank financing takes too long, you are rejected or have limitations on how you spend the money, you might do well to consider outside investors and/or your own capital or credit.

Additionally, alternative lenders such as Reliant Funding may be able to give you cash in days, not weeks or months. Plus, there are no collateral or pledged assets required and you can use the money any way you want without restrictions.

Expect the unexpected

Did you leave any “wiggle-room” in your budget? Plan for a little spare cash for unpleasant surprises during your project. For example, if you’re opening a restaurant, the gas line hook up could cost you up to $10K. The exhaust fan for a multi-story building could range from $15K to $50K. Extra padding could help you especially if you lose sales during a remodel closure. What do you do if your planned closure takes longer than promised? You should be prepared to expect the unexpected.

Title work

Don’t overlook something as simple as running a title report on a property. It is sensible to hire a real estate attorney to confirm that the property is free of liens and encumbrances.

Quick Tip

Common types of permits are “impact fees”. At times, city and county governments charge substantial fees for connecting to utility services such as water, sewers, storm water treatment, and roads. Check with the site’s local government to include them in your budgetary numbers.