Construction Loan Note - CLN

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DEFINITION of 'Construction Loan Note - CLN'

A short-term obligation in the form of a note, used for the funding of construction projects such as housing developments. In most cases, the note issuers will repay the note obligation by issuing a longer term bond and using the proceeds from the bond to pay back the note.

BREAKING DOWN 'Construction Loan Note - CLN'

This type of financing is most often seen at the municipal level: for example, a large city might use a construction loan note to finance a large housing project to meet the demands of its growing population.

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