Floor loan

A floor loan refers to the minimum amount of money that a lender is willing to lend in order to enable the builder to begin the construction of a building that is to be occupied by tenants. The term is thus closely associated with mortgage and property loans. The rest of the loan's balance is given to the builder upon the achievement of certain milestones related to the sale or lease of its residential space. For example, a bank may advance 80% of the balance of a property loan to the builder and release the remaining 20% upon the successful construction lease or sale of the building's residential units.