Floor Loan


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.


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.

  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. Loan Commitment

    A loan amount that may be drawn down, or is due to be contractually ...
  4. Bridge Loan

    A short-term loan that is used until a person or company secures ...
  5. Interest Rate

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

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