How Long Does It Take to Close a Construction Loan?
The answer depends entirely on who you are borrowing from. Here is the real timeline for both banks and private lenders, and what you can do to make sure your deal closes as fast as possible.
Why the Timelines Are So Different
The gap between a 10-day private lender close and a 60-day bank close is not a matter of one lender working harder than another. It is a matter of fundamentally different processes, different decision-making structures, and different risk frameworks.
A conventional bank construction loan goes through multiple internal departments, a credit committee, a compliance review, an environmental review, an appraisal ordering process, a title company coordination process, and a legal review before it can close. Each of these steps involves different people, different systems, and different internal timelines. None of them are optimized for speed because the bank’s primary concern is risk mitigation across a large portfolio of loans, not the competitive real estate timeline of any individual developer.
A direct private lender operates with a single underwriter, a single decision maker, an established title and legal team, and a process that has been built from the ground up to close as fast as possible without cutting corners on due diligence. The risk framework is different, the capital structure is different, and the result is a closing timeline that a bank cannot match.
Day by Day: How Each Process Unfolds
Conventional Bank Timeline
Mayflower Venture Partners Timeline
What Affects Your Closing Timeline
Even with a private lender who closes in 10 to 14 business days, certain factors on the borrower side or the deal side can extend that timeline. Here is what to watch out for and how to stay on track.
Factors That Affect How Fast You Close
Title Issues
A clean title is the single most common source of unexpected closing delays. Liens, encumbrances, easement disputes, or prior deed irregularities can add days or weeks to your timeline. Order your title search as early as possible and address any issues immediately.
Borrower Responsiveness
The most common reason a 10-day close becomes a 20-day close is borrower responsiveness. If your lender requests a document and you take three days to provide it, your closing slips three days. Treat the closing process like a full-time job for two weeks and you will close on time.
Appraisal Scheduling
In competitive markets, appraisers can be booked out one to two weeks. Order the appraisal the same day you receive your term sheet. Every day of delay in ordering the appraisal is a day added to your closing timeline.
Entity Documentation
If you are borrowing in an LLC, that entity must be in good standing with a current operating agreement, EIN, and certificate of good standing. Having these ready before you apply removes one of the most common pre-closing bottlenecks.
Insurance Procurement
Builder’s risk insurance, general liability, and the required mortgagee clause must be in place before closing. Contact your insurance broker the day you receive your term sheet and provide them with the mortgagee clause information immediately.
Construction Budget Finalization
Your construction budget must be finalized before closing so that the draw schedule can be established. If you are still working with your GC on budget numbers at the time of your term sheet, that conversation needs to happen immediately and cannot wait.
How to Close as Fast as Possible
Developers who close in 10 business days are the ones who are organized, responsive, and prepared before the first call. Here is exactly what to have ready when you approach a private lender.
Pre-Application Readiness Checklist
At Mayflower Venture Partners, we issue term sheets within 24 hours and close in 10 to 14 business days for experienced developers throughout Massachusetts, Connecticut, Rhode Island, New Hampshire, and Maine. If you have a deal under agreement and need to close fast, call us today.
Ready to Close in 10 Days?
Direct private lender. Term sheets in 24 hours. Close in 10 to 14 business days.