Loan-to-CostLTC
Quick answer
Loan-to-cost (LTC) is the ratio of a loan amount to the total project cost, including acquisition, hard costs, soft costs, and carry.
Loan-to-cost measures leverage against what a project actually costs to build or reposition rather than what it is worth today. It is the controlling metric on construction and bridge loans, where there is no stabilized value yet. Senior construction lenders typically fund 55–65% LTC; bridge lenders typically fund 65–75% LTC, with mezzanine debt or preferred equity filling the gap above that.
Formula
LTC = Loan Amount ÷ Total Project Cost
Example: $13,000,000 loan ÷ $20,000,000 total cost = 65% LTC
Related product: Construction Financing
Related terms
Engage
Ready to structure your next deal?
Submit your transaction or schedule an introduction call. Confidential review within 48 hours.