Builders Capital Secures $300 Million in First Phase of Multi-Billion Dollar Capital Raise
Builders Capital, the nation’s largest private construction lender, has announced the successful closure of the initial phase of its capital raise, securing $300 million. This marks the first step toward their ambitious goal of raising billions of dollars to address the financing gap left by regional banks in supporting home builders. The ongoing economic uncertainties and challenges faced by regional banks have led to a reduction or pause in lending for new projects, creating a void that Builders Capital aims to fill.
By providing flexible and timely financing solutions tailored to the unique needs of builders and developers nationwide, Builders Capital seeks to address the pressing need for capital in the housing construction industry. Since its establishment in 2009, the company has originated over $8 billion in new construction loans, contributing to the creation of tens of thousands of new homes.
“This new capital raise will enable the company to expand its lending capacity and better serve customers in this challenging environment,” said Rob Trent, CEO of Builders Capital. “By aligning with builders and providing them with the capital they need to continue building new homes, Builders Capital is helping fuel the recovery of the housing market and aid in providing much-needed new home inventory.”
The timing of this capital raise is significant, as recent reports indicate a positive trend in the new home market. According to Zonda’s New Home Pending Sales Index, new home sales experienced a 1.0% month-over-month increase in April 2023. Builder confidence has also been steadily rising after reaching a low point in late 2022. This optimistic market outlook reflects the eagerness of homebuyers to purchase new homes and the determination of builders to meet the demand.
The shortage of new home inventory needed to satisfy market demand is a pressing issue, with estimates ranging from 4 to 6 million homes. Coupled with the significant increase in mortgage rates over the past year, this supply-demand gap has created affordability challenges in most markets. Builders need access to capital to address this problem and contribute to solving the affordability crisis. Builders Capital has always played a crucial role in supporting home builders, and its importance has only grown in the current market conditions.
“Securing a reliable capital partner is a critical need for builders, which is why we continue to raise and deploy capital at a torrent pace to ensure we’re there for our clients when other lenders retreat,” stated Curt Altig, Chairman and Founder of Builders Capital.
Builders Capital offers a wide range of innovative financing solutions, including acquisition, development, construction, and bridge financing. They provide single asset loans, portfolio loans, and revolving credit facilities to meet the diverse needs of developers and builders. In addition to financing opportunities, Builders Capital offers material purchase discounts through national accounts and access to cutting-edge technology for project management, accounting, and BIM technology tools.
Headquartered in Puyallup, Washington, Builders Capital has regional sales offices across the country. With a management team boasting over 100 years of expertise in residential construction lending, home building, real estate development, and loan servicing, Builders Capital is well-positioned to support builders and drive the growth of the housing market.