For experienced developers managing complex, multimillion-dollar projects, the structure of your financing can dramatically impact both timeline and profitability.
Two common options are construction-to-permanent loans and bridge loan construction financing. While these products serve different purposes, they can both support experienced business entities—depending on project goals and strategies.
In this guide, we break down both products and compare how they apply to business-purpose, non-owner-occupied development through LLCs and corporations.
Understanding the distinctions and potential use cases is critical for developers scaling from three to ten or more projects across California, Texas, or other high-opportunity markets.
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Understanding construction-to-permanent loans
A construction-to-permanent loan (also called a one-time close loan) is a hybrid product that combines two phases:
- Construction phase: Funds the building of the property
- Permanent phase: Converts into a long-term mortgage (typically 15–30 years) after construction completion
Traditionally, these loans have been geared toward owner-occupied residential projects. However, in the private lending and non-QM space, some lenders offer business-purpose variants of construction-to-permanent loans—most notably combining them with DSCR (Debt Service Coverage Ratio) loan structures.
In this strategy, the construction loan rolls into a DSCR-based rental loan, eliminating the need for a separate refinance. This hybrid is especially valuable for developers intending to build and hold income-generating properties under an LLC or corporation.
Even when not packaged as a single “C-to-P DSCR loan,” many investors use a similar approach: secure a short-term construction loan, complete the build, and then refinance into a DSCR loan once the asset is stabilized and generating rental income.
This allows them to access better rates and longer terms while retaining ownership within their business entity.
Pros of construction-to-permanent loans
- Single loan process: One application, one set of closing costs
- Rate protection: Lock in your long-term rate upfront
- Long-term hold strategy: Ideal for build-to-rent developers with stabilized exit plans
- No takeout risk: No need to requalify at project completion
- Potential cost savings: Avoids second loan fees, legal costs, and new underwriting
Considerations for experienced developers
- Requires rental income or a lease-up plan for DSCR conversion
- May involve tighter loan-to-cost ratios or leverage restrictions
- Less flexible than short-term bridge structures if the scope changes
What bridge loan construction financing offers
Bridge financing in construction is designed to cover short-term funding gaps. It’s often used by experienced developers to acquire land, fund active builds, or refinance stalled projects.
Bridge loans can be originated quickly, often within 10–21 days, and are based on asset value rather than personal income.
For developers working through LLCs or corporations, bridge construction loans are the industry standard, especially for projects in fast-moving or highly competitive markets.
Key features of bridge loan construction financing
- Short-term structure: 6–18 months typical term
- Entity-focused underwriting: Designed for LLCs and corporations
- Asset-based qualification: Stated income or no income verification
- Faster closings: Often 2–4x faster than bank-originated construction loans
- Staged draws: Supports active construction timelines with milestone-based funding
When bridge loans shine for experienced developers
- Mid-construction funding to keep projects on track
- Acquiring build-ready lots or entitled land under tight deadlines
- Refinancing maturing or delayed construction loans to preserve equity
- Covering gap financing before sale, refinance, or long-term rental stabilization
- Supporting parallel developments by leveraging equity across multiple deals
Bridge loans provide the flexibility that seasoned developers need—especially when juggling multiple builds, coordinating contractor schedules, navigating permit delays, or repositioning a property for value add.
Comparing construction-to-permanent vs bridge loan construction
Let’s look at how these two products stack up across the criteria that matter most to experienced developers operating through business entities:
| Feature | Construction-to-Permanent Loan (C-to-P) | Bridge Loan Construction |
| Best for | Build-to-hold with rental DSCR exit | Build-to-sell or refinance projects |
| Term | 12-month construction + 30-year DSCR | 6–18 months bridge term |
| Speed | 30–45 days to fund | 10–21 days typical |
| Qualification | Based on projected rental income (DSCR) | Asset-based, stated income OK |
| Entity lending | Yes, if structured for business purposes | Yes, standard for LLCs/Corps |
| Flexibility | Medium | High |
| Exit strategy | Long-term hold | Sale, refinance, or repositioning |
| Underwriting process | Hybrid: construction then DSCR takeout | Streamlined asset-based review |
Use cases and scenario planning
For developers operating through LLCs and corporations, the decision often hinges on whether you’re building to hold or building to exit.
Below are practical scenarios where each loan type makes sense.
When a construction-to-permanent loan may be the right fit
- You’re developing a rental property you intend to hold for income
- You want to avoid refinancing risk or rate changes post-construction
- The asset will support a strong DSCR-based takeout upon stabilization
- You have time to close and prefer the simplicity of a single loan process
- You’re building smaller multifamily or single-asset deals with strong projected cash flow
When a bridge loan is the better solution
- You need to close quickly to acquire land or begin construction
- Your project involves short-term repositioning, resale, or value add
- You plan to refinance into DSCR or agency debt after stabilization
- You’re managing multiple concurrent builds with staggered timelines
- You need maximum leverage and draw schedule flexibility to move efficiently
Both products serve experienced developers, but in different phases of a strategic portfolio approach.
The choice often comes down to timing, exit strategy, and the level of certainty you need at each stage.
How Marquee Funding Group’s model fits
Marquee Funding Group specializes in business entity construction loans for developers with 3+ completed projects, typically in the $750K–$5M range.
Our expertise allows experienced developers to:
- Close fast with a bridge structure when speed matters
- Build toward a planned DSCR refinance without disruptions
- Tailor financing structures to match exit strategy, project timeline, and capital stack
This flexibility is especially important for developers growing a regional portfolio across high-cost markets like Los Angeles, San Diego, and the Bay Area.
The bottom line for experienced developers
If you’re a seasoned builder operating through an LLC or corporation, your financing structure should align with your exit strategy.
Having access to both types of financing—and knowing when to use each—can dramatically improve your time-to-market, ROI, and long-term growth potential.
Ready to fund your next $1M+ construction project? Get started with Marquee Funding Group today to explore your options for your next deal.