Stage-correct lender match
We place the file with the bank, NBFC-HFC or AIF whose LTV, pricing and speed actually fit your stage — not the one institution you happen to bank with.
The build-out, funded to the milestone.
Construction Finance for Builders
We arrange milestone-drawn construction finance for RERA-registered projects — matched to the right capital pool, structured around your sales waterfall, and built to clear credit committee the first time. Banks, NBFC-HFCs and Category-II AIFs, one advisor. CA + ex-banker led. ₹4,250 Cr+ facilitated since 2011.
Milestone-drawnRERA-ready filesAll 3 capital pools
A track record since 2011, in numbers
₹4,250 Cr+
Capital facilitated across sectors₹550 Cr
Largest single facility structured3 pools
Banks · NBFC-HFCs · Cat-II AIFsSince 2011
Advising developers & promotersConstruction finance is the one stage banks actively fund — once RERA registration and approvals are in place. It is drawn in milestones and repaid from the sales waterfall. The art is matching the facility to the project’s stage, LTV and cash flow, and sequencing any earlier land or premium debt into it.
Finnova Advisory is an advisory firm — we structure the file and negotiate terms; the lender sanctions and disburses.
The facility at a glance
What construction finance typically looks like
Indicative parameters for a milestone-drawn construction facility on a RERA-registered project. The exact terms depend on lender, location, asset class and sponsor strength.
Loan-to-cost (LTC)~60–65%Of approved project cost
Interest rate~10–14% p.a.Banks lower; NBFC-HFCs flexible
Tenor3–5 yearsMatched to the build + sales cycle
DrawdownMilestone-linkedPlinth → slabs → finishing → OC
Minimum ticket~₹25 CrSmaller via select NBFC-HFCs
SecurityLand + receivablesPlus 30% pool, guarantees
Indicative only — not an offer. Loan-to-cost, rate and tenor vary by lender, project stage, location and track record. We tell you the bankable figure at diligence and run a competitive process to it.
Who funds construction
Three capital pools — matched to your file
Construction finance can come from a bank, an NBFC-HFC or, where the structure needs it, a Category-II AIF. The right one depends on your approvals, LTV and speed — not whichever lender is in the room.
Capital poolWhat they fundLTVRateNotes
Banks FundsConstruction (post-RERA), LRD, takeout LTV~50–60% Rate~10–12% p.a. NotesCheapest, but need full approvals; barred from land
NBFC-HFCsMost flexible FundsLand, premium, construction, inventory LTV~55–65% Rate~11–16% p.a. NotesFlexible on stage, structure and speed
Category-II AIFs FundsMezzanine, gap, special situations LTVStructured Rate~14–18%+ NotesWhere LTV, stage or speed stretches mainstream lenders
A common structure: an NBFC-HFC or AIF funds land and early stages (which banks are barred from), then a bank construction facility refinances it once RERA and approvals land — compressing cost as the project de-risks.
Why Finnova
A file built to clear credit committee — first time
Six reasons developers hand us the construction-finance mandate rather than walking it bank to bank themselves.
RERA-compliant structuring
The file satisfies RERA, the 70% escrow and approval requirements before a credit team ever raises them — the most common reason a fundable project stalls.
Cash-flow underwriting
Repayment is structured around your sales and leasing waterfall, so the facility survives a slow quarter instead of tripping a default.
Land sequenced into construction
Where land is still outstanding, we arrange NBFC-HFC or AIF capital and bridge it into the cheaper bank construction facility as approvals fall into place.
CA + ex-banker on the file
The people who model your project and negotiate your sanction have sat on both sides of a credit committee. The numbers are read the way a lender reads them.
Competitive process
We run lenders against each other on pricing, LTV and covenants — then stay on file through legal, escrow and drawdown, and the next tranche.
Eligibility & documentation
What a fundable construction file needs
A construction facility is only as strong as its title, approvals and cash-flow story. Here is what we assemble and pressure-test before the file goes in.
Documents we assemble & pressure-test
- RERA registration and the approval roadmap
- Sanctioned building plans and statutory approvals (IOD/CC)
- Land title documents, title search report and encumbrance certificate
- Project report with stage-wise cost and cash-flow projections
- Sales/booking status and the receivables waterfall
- Last 3 years’ audited financials of the developer entity
- Existing sanction letters, lender NOCs and escrow arrangements
- KYC of developer, promoters and authorised signatories
Indicative — exact requirements vary by lender and asset class. We tell you precisely what each bank, NBFC-HFC or AIF will want before the file goes in.
Good-fit profile
- RERA registeredRequired
- ApprovalsIn place / mapped
- Ticket size₹25 Cr+
- Asset classResi / commercial / mixed
No approvals yet, or land still to be bought? Start with land acquisition finance — we sequence it into construction once the project clears RERA.
Process
How an engagement runs — our 5-step path
From project diligence to drawdown, with senior people on the file at every stage and timelines you can plan around.
Project diligence
3–5 daysTitle, approvals, stage-wise cash-flow and sponsor review — we establish what’s bankable, at what LTV and on what terms before any obligation.
Stage-matched lender shortlist
2 daysWe match the project to the right capital pool — bank, NBFC-HFC or Category-II AIF — and approach the desks most likely to say yes on your terms.
Pack & submission
7–10 daysWe compile a CAM-ready pack and financial model, pre-empting the queries a credit committee will raise before the file is submitted.
Sanction negotiation
3–6 weeksWe negotiate pricing, LTV, covenants and security on your behalf, running a competitive process to the sanction that fits the project.
Documentation & drawdown
2–3 weeksLegal, escrow, security and the first milestone draw — and we stay on file for subsequent tranches and the bridge into cheaper capital as the project progresses.
Consultation
Tell us about your project
One conversation tells you how much construction finance the project supports, which capital pool fits, and how fast it can close. No pitch — a straight read from people who structure construction finance every week.
Thank you — your enquiry has been submitted
We’ve received your details. A senior member of our team will review them and get back to you within one business day. Everything you’ve shared stays strictly confidential.
FAQ
Construction finance, answered
Construction finance is project debt drawn down in milestones to fund the build-out of a RERA-registered real estate project — from plinth to completion. It is repaid from the project’s sales or leasing cash flows. Unlike land funding, banks can and do provide construction finance, alongside NBFC-HFCs, once RERA registration and statutory approvals are in place.
Indicatively 60–65% of cost (LTC) or value, at roughly 10–14% p.a. over a 3–5 year tenor, with a minimum ticket around ₹25 Cr. Banks price the lower end but need full approvals; NBFC-HFCs are more flexible on stage and structure. Actual terms vary by lender, location, asset class and your track record — we tell you the bankable figure at diligence.
Banks fund construction, not land — RBI bars them from financing a private builder’s land acquisition. If land cost is still outstanding, the land portion has to come from an NBFC-HFC or a Category-II AIF, and is then typically bridged into the bank construction facility once RERA and approvals are in place. We sequence both so each rupee is priced to its stage. See our [land acquisition finance](/land-acquisition-finance) page.
Under RERA, 70% of the money collected from allottees must sit in a dedicated project account and can only be withdrawn against construction and land cost, certified by an engineer, architect and CA. Lenders cannot take a charge over that 70% pool, so construction-finance security usually sits on the project land, receivables, the 30% pool and promoter guarantees. A file built around this clears credit committee faster.
In real estate the terms are used interchangeably — “project finance” is the broader label and construction finance is the build-out facility within it. What matters is matching the structure to the project stage, LTV and cash-flow waterfall, which is what we do across banks, NBFC-HFCs and AIFs.
We are an advisory firm, not a lender. We build the file the way a credit committee reads it, run a competitive process across the right capital pools, and negotiate pricing, LTV, covenants and security — the lender sanctions and disburses.
Further reading
Guides on construction finance
Go deeper on rates, documents and how the capital stack fits together.