Private lenders with in-house construction management teams are taking market share from regional banks by processing construction draws up to 10 times faster, according to David Hada, CFO of Ascent Developer Solutions. As regional banks pull back lending and face operational bottlenecks, private lenders like Ascent are using real-time project oversight and embedded expertise to win deals with developers who prioritize speed and execution.
For years, regional banks have been the primary source of residential construction loans. But Hada says that’s changing as developers seek partners who can disburse funds in days rather than weeks. Ascent, for example, processes construction draws in one to three days, sometimes in just hours, while most banks take two to four weeks.
“We’re turning draws in one to three days, sometimes in less than a day,” Hada says. “We’re able to turn draws very quickly for our sponsors, without skipping on any of the controls.”
This speed does not come from relaxed underwriting standards. Instead, it results from a different operational model in which private lenders integrate construction professionals directly into their loan servicing teams and monitor project budgets at the line-item level before any draw request is made.
The gap, Hada explains, is structural. Regional banks are limited by legacy systems and staffing models that were not built for rapid, real-time project management. “Banks may turn a draw every two to four weeks,” Hada says. “They’re just limited in their ability to process quickly.”
This isn’t simply a matter of hiring more staff. Hada points to systemic issues, such as outdated processes and a lack of real-time visibility, which prevent banks from keeping pace with the requirements of modern construction sponsors. As regional banks have pulled back on lending, capacity constraints have created what Hada calls “a little bit of a vacuum” in the construction lending market. Private lenders with robust operational teams are stepping in to fill this gap.
The main advantage for private lenders comes from dedicated construction management teams. Ascent’s model involves tracking every project budget line item in detail and using platforms like TrustPoint to monitor progress in real time. “We’re tracking all of their budgets at the line-item level,” Hada explains. “When they’re requesting draws, for example, that’s an opportunity where we’re de-risking the project. They’ve laid a foundation. We’re issuing the draw for that.”
Beyond processing draws, the construction management team evaluates a sponsor’s construction track record before a deal closes. This includes analyzing budget discipline, quality control, and schedule adherence using a data-driven approach. “We’re looking at budget, their ability to hit budget quality, their ability to hit schedule,” Hada says. “We want to make sure that they’re good, because the risk in construction lending is when projects are very early stage, and things can go sideways.”
This embedded expertise allows private lenders to flag risks and add value for sponsors, not just supply capital. Hada notes that Ascent’s team often identifies construction or value risks that sponsors may have missed. “There have been times when we’ve flagged things to the sponsor that they may not have considered from a value perspective, or even from a construction risk management perspective,” he says.
By offering this level of partnership, private lenders like Ascent position themselves as risk management allies rather than just capital providers. “It goes back to this DNA where we’ve been operators ourselves,” Hada explains. “We know what questions to ask and where the potential landmines might be on a deal. We partner closely with our sponsors to help them manage risk, and we manage risk as well.”
Ascent’s leadership team includes former developers and equity operators, which Hada says is central to their approach. Referring to company founder Robert, Hada notes, “Coming out of the crisis, I think he bought, rehabbed, and flipped up to 3,000 different homes.” This operational background shapes Ascent’s focus on execution and risk management.
Hada believes this construction management edge will persist even if regional banks eventually restore lending capacity. “Even if regional banks were at scale and competing aggressively, we believe we can still compete effectively because of this differentiator and other advantages,” Hada says.
Other advantages, according to Hada, include stronger capital structures and more sophisticated valuation capabilities. But on the construction management side, the key is hiring people with firsthand operational experience and equipping them with technology for real-time decision-making.
As the construction lending landscape evolves, speed and embedded expertise are quickly becoming essential for winning deals with experienced developers. Private lenders that can process draws in days and provide real-time project oversight are setting a new standard for service and risk management. Whether regional banks can adapt, or whether private lenders’ models becomes the new industry norm, remains to be seen. For now, firms that combine capital with construction expertise are capturing the business that banks are leaving behind.
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