Kiah Treece

Kiah Treece

Loan-to-Cost Ratio (LTC)

The loan-to-cost (LTC) ratio is an important metric that real estate developers and lenders use to analyze the financial feasibility of a commercial construction project. The LTC ratio is used to compare the loan amount to the total cost of the project, with a higher LTC ratio indicating more risk for the lender. In this way, lenders can use LTC to evaluate the amount of risk posed by a loan—and developers can determine how much equity they’ll have in a project. 

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