Floor Loan

AAA

DEFINITION of 'Floor Loan'

In real estate construction, the minimum loan that a lender agrees to advance in order to enable the builder to commence construction and development of a project. Floor loans apply to buildings that will be occupied by tenants.

INVESTOPEDIA EXPLAINS 'Floor Loan'

For example, a bank may agree to advance 70% of the total project cost, with the balance of 30% to be released upon the project achieving certain milestones. These milestones typically include a successful sale or lease of the majority of the project's units, obtaining an occupancy permit, etc.

RELATED TERMS
  1. Construction Mortgage

    A loan borrowed to finance the construction of a home and typically ...
  2. Construction Loan Note - CLN

    A short-term obligation in the form of a note, used for the funding ...
  3. End Loan

    A permanent, long-term loan used to pay off a short-term construction ...
  4. Loan Commitment

    A loan amount that may be drawn down, or is due to be contractually ...
  5. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  6. Bridge Loan

    A short-term loan that is used until a person or company secures ...
Related Articles
  1. Is Loan Protection Insurance Right For ...
    Insurance

    Is Loan Protection Insurance Right For ...

  2. Avoid The Generation Debt Trap
    Credit & Loans

    Avoid The Generation Debt Trap

  3. Home-Equity Loans: What You Need To ...
    Options & Futures

    Home-Equity Loans: What You Need To ...

  4. Payday Loans Don't Pay
    Options & Futures

    Payday Loans Don't Pay

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center