InsightsThe ranges lenders work in
Construction loans for commercial and residential development in Ontario generally run from $3M to $100M+. On eligible projects, senior construction debt can reach up to 85% of total project cost, with terms of up to 36 months. Facilities are typically interest-only during the build, with an interest reserve built into the loan so the project is not carrying debt service out of pocket while there is no revenue.
Where senior leverage stops short of what the budget needs, the gap is filled with mezzanine debt, preferred equity or joint venture capital. The total a sponsor can borrow is therefore a function of the whole capital stack, not just the senior loan.
What decides your leverage
Lenders size a construction loan against four things: the budget, the schedule, the sponsor and the exit. A realistic line-item budget with contingency, a credible construction schedule, a sponsor with a track record of completing comparable projects, and a clear take-out — a CMHC-insured or conventional refinance for rental, or sales closings for condo — each move leverage up. Weakness in any one of them moves it down.
Pre-sales or leasing evidence matter as much as the pro forma. A project with strong pre-sales in Toronto, York Region or Ottawa will support materially more leverage than the same project without them, because the lender's exit is de-risked.
A practical example
Illustrative transactions show the spread. A high-rise condominium in Toronto supported $122M of senior construction financing. A multifamily construction mandate in Ontario is sized at $51M. A student housing project in Austin, Texas — cross-border, placed in US dollars through licensed partners — closed at $55M. Each number reflects the asset, the market and the sponsor behind it, not a formula.
How to get a real number
The fastest route to a real answer is an indicative term sheet. Share the request, the asset, the sponsor and the timeline; a financeable file gets a first read within 24 hours, with leverage, structure and pricing set before any lender is approached. From there, competing term sheets are compared on rate, fees, leverage, covenants, reserves and prepayment — the terms that matter to the business plan, not the headline rate alone.