Ground-Up Construction Loans: The Smart Path for Higher-End Development

You’ve got the team. You’ve got the land. You’ve proven your ability to build from the ground up—not once, but multiple times. 

Now it’s time to scale into your next high-end project. But turning a raw lot into a multimillion-dollar development takes more than a great design and a trusted GC—it takes the right financing partner.

Ground-up construction loans are designed specifically for experienced developers who build serious projects in the $1M–$5M range.

This guide walks you through how ground-up construction loans work, what sets $1M+ new construction financing apart, and why Marquee Funding Group is the preferred lender for business entities looking to scale fast and smart.

What is a ground-up construction loan?

A ground-up construction loan is short-term financing used to cover the costs of building a structure from the ground up. 

This includes:

• Land preparation
• Permitting
• Materials
• Labor
• Interest reserves
• Soft costs

In contrast to renovation or bridge loans, ground-up financing starts with a vacant lot or teardown property and covers the entire vertical build process—from grading and foundation pouring to final finish work and certificate of occupancy.

For experienced developers, especially those working on $1M+ projects, these loans offer flexible draw schedules and underwriting based on the project’s financials, not personal income.

Who qualifies for ground-up construction financing?

At Marquee, ground-up construction financing is available exclusively to:

• Business entities: LLCs, corporations, partnerships
• Experienced developers: Minimum 3 completed projects
• Loan sizes from $750K to $5M, with a focus on $1M+ builds in California
• Urban and core markets only: No rural or fringe zones

What you’ll need

• Proof of entity formation (EIN, Operating Agreement)
• Detailed track record (photos, budgets, timelines from past 3+ projects)
• Architectural plans, permits, and GC bids
• Exit strategy (sale or long-term hold)

Key components of a $1M+ ground-up loan package

Lenders like Marquee evaluate your deal based on the following factors:

1. Project feasibility

• Market comps
• Projected value (“as-completed” appraisal)
• Timeline to completion
• Entitlement status and permit viability

2. Sponsor experience

• 3+ completed ground-up or heavy rehab projects
• Reliable builder team and subs
• History of on-time and on-budget delivery
• Business credit profile and prior lender relationships

3. Financial structure

• Clear hard and soft cost breakdown
• Interest reserve and contingency fund
• Construction draw schedule (aligned with milestones)
• Documentation of initial equity investment or land value contribution

4. Location intelligence

• Desirable urban/suburban infill locations
• California core metros (Los Angeles, San Diego, SF Bay Area)
• Local permit feasibility and entitlement timeline
• Access to utilities and infrastructure

What makes $1M+ new construction financing unique?

High-end ground-up projects differ significantly from lower-budget or speculative builds. 

Here’s what to expect:

• More complex permitting: Custom homes or multi-units often require variances, environmental review, or design board approvals.
• Larger capital reserves required: Lenders expect 6-12 months of liquidity and 10-20% of the budget in reserves.
• Sophisticated appraisal needs: FIRREA-compliant “as-completed” appraisals with cost-based valuation.
• Draw administration: Most draws are tied to inspections and line-item completion, not just invoices.
• Longer construction timelines: $1M+ projects often span 9–18 months, which impacts interest reserves and contingency planning.

For developers managing multiple projects or portfolios, managing cash flow across these phases is critical to avoid bottlenecks or costly delays.

Advantages of ground-up construction loans for experienced developers

When structured properly, ground-up loans provide tremendous advantages:

• Entity-based underwriting: Focus is on your development business, not personal credit or income
• Scalable financing: Access $750K to $5M based on your project scope
• Speed-to-close: Marquee can close in as little as 10 days, a major advantage in competitive land deals
• Flexible structures: Interest-only during construction, balloon or refi options at stabilization
• Professional relationship: Lenders work directly with your GC, title company, and draw inspectors for a smooth funding pipeline

These benefits make new construction financing ideal for business entity developers who want control, scalability, and smart leverage.

Why developers choose Marquee for ground-up loans

Marquee’s program is built around experienced developers using business entities to scale their operations.

• 3+ project requirement: We only work with established developers—no beginners
• Business entities only: LLCs, Corps, and Partnerships required
• Local market expertise: We understand entitlement timelines, cost trends, and exit comps in California markets
• Loan amount focus: $750K–$5M range sweet spot ensures we’re built for serious developers
• Transparent process: From term sheet to closing, our team communicates clearly and quickly

Our underwriting and draw administration are designed for professional teams building real projects, not flipping cosmetic rehabs.

Developer pro tips for a strong application

To streamline your ground-up financing approval:

• Create a one-page deal overview with site, plans, budget, and projected timeline
• Include photos and ROI summaries of your last 3 projects
• Provide a detailed draw schedule and GC budget
• Use entity-specific documentation: operating agreement, contractor license, permits
• Engage your GC early—GC experience and licensing is often a key approval factor
• Include soil reports and civil engineering plans if the lot is sloped or requires grading

Seasoned developers know: The stronger and clearer your package, the faster and smoother the process.

Final word: build bigger, smarter

Ground-up construction loans unlock the potential of raw land and underused lots—but only when financed right. 

For experienced developers, these loans are a key part of scaling into larger projects and multi-million-dollar builds.

With Marquee Funding Group, you get a lender who understands the high stakes of high-end construction. We finance your LLC or Corp like a business, not a side hustle.

Apply with Marquee Funding Group now if your next build is $1M+ and your team is ready.