Builders Capital Review 2026: Terms, Draw Lawsuit, Fund Filings

Which Builders Capital this is, and who stands behind the name

Search results for this name mix several unrelated companies, so the first job is to separate them. The lender people usually mean is the one on builderscapital.com. Its footer says it “is a tradename for Construction Loan Services II, LLC,” operating inside the Builders Capital Exchange (BCX) brand network, and that the Builders Capital trademarks belong to HAT LLC and are used under license. The company's own timeline dates Builders Capital to 2009 and BCX to 2026. Two common assumptions are off: the headquarters is no longer in Seattle (the website gives 1019 39th Ave SE, Puyallup, with a Fort Lauderdale regional office), and the customer is a builder with a pipeline, not an investor buying one house to flip.

What the website says it lends, and what it leaves out

Everything in this section is the lender's claim as printed on builderscapital.com on October 9, 2026. There are four products, all for “experienced” builders, and each loan can cover several properties in the same jurisdiction.

What is missing matters as much as what is there. No product page shows an interest rate, a point, an extension fee, a draw fee, a prepayment term or a minimum loan size. The comparison table on the ground-up page lists Builders Capital's origination fees as “Transparent” and says other lenders often have “hidden or layered fees,” without a figure for either. The website also does not say whether loans are recourse; the one place we can see actual terms is the court record below.

What it does promise is structure. It sets an annual exposure limit “of up to $350MM” based on the builder's scale, then reviews each project inside that limit. It says there are no large deposit requirements, no spec-home limits on concurrent projects, no cross-lender covenants and “Quarterly financial reporting only.” For draws it says it has an internal servicing team and “24-hour online access to loan details and draw requests” through its borrower portal. It does not describe inspections, who orders them, who pays, or how long a draw takes.

On size, the Builders Capital site says “$17B+” of projects financed for 500+ builders, and the BCX site says $17.5B of lifetime funded volume across 5,000+ loans, an average of about $3.5 million per loan (our arithmetic). The 23 “recently funded” loans on the product pages are consistent with that: the smallest is $1,247,259 (two single-family units in Boise) and the largest $83,856,585 (a master planned community in Moab), with 11 above $10 million and 5 below $2 million (our counts). Lenders that publish rates and size ranges for single-project investors are compared in our ground-up construction loan guide. None of these size and volume figures is audited or filed anywhere we could check.

What a federal court said about draws and extensions

The only place the loan terms and the draw experience of Builders Capital borrowers are on public record is a federal case in Philadelphia. In January 2026 four related real estate developers with Philadelphia projects sued Construction Loan Services II (doing business as Builders Capital), two Saluda Grade entities that the court says helped underwrite the loans and now own them, and six individuals including the company's chairman and founder. The plaintiffs filed an amended complaint on May 11, 2026. Everything below about what the loans said and what happened is alleged in that complaint; the court has not found any of it to be true.

The four principal amounts add up to $86,878,451.44 and the first-extension fees alleged to $817,419.87 (our sums). The plaintiffs say each promissory note provided that “no extension fee shall be due or payable in connection with the first extension period” and a 0.00% rate increase on extension, and that they were instead made to sign amendments with fees and higher rates. They also allege origination fees of $164,366.88 (two percent) on the Midvale loan and more than $680,000 combined on the Indiana Heights loans, and that the Germantown letter of intent in November 2021 described 7.75% on drawn funds only, a 30-month term with two six-month extensions, financing costs of about 2.9% including a 1% broker fee, no deposit and limited-recourse guarantees. These are 2021 and 2022 loans in a different rate market, but they are the only itemized Builders Capital terms we could find from a primary document.

The court's September 29, 2026 memorandum describes the borrowers' story this way: for the first twelve to eighteen months draw requests were fulfilled, then “subsequent draw requests were delayed or rejected,” which the plaintiffs call pretextual. When the first maturity dates arrived, the lender refused a fee-free extension and, according to the court's summary, argued that the extension language applied only if there was “satisfactory progress in construction of the Project[s]” as the lender determined. The borrowers say they signed amendments under financial pressure. The amendments contain releases of lender-liability claims the borrowers knew about at signing.

The ruling itself is narrow. The judge dismissed Counts I and II, the racketeering counts, writing that the draw delays and denials “sound in breach of contract” and that the allegations did not meet the heightened pleading standard for fraud. On Count III, breach of the loan agreements, the court found the plaintiffs had pleaded a plausible claim, including that the lender breached the draw sections of the loan agreement and the extension sections of the promissory note. On the key question it wrote: “The question of whether defendants breached their contractual duties remains open.” On the releases it wrote that “Whether Loan Services in fact breached its contractual obligations and whether the releases bar these claims are questions to be resolved on a later day.” The docket shows a scheduling order and an initial pretrial conference entered on October 8, 2026. So as of today the case is alive on contract grounds only, with no finding for or against the lender.

The rest of the court record

A text search of the RECAP archive (which covers only part of the federal courts) for “Construction Loan Services II” returns 32 dockets: 24 in bankruptcy courts and 8 in federal district courts, 6 with the company in the case caption, 16 filed since January 1, 2025 and 9 filed in 2020 to 2022 (our counts, not verified docket by docket). A construction lender with thousands of loans (by its own count) will appear as a secured creditor when borrowers fail, so the count is context, not a verdict.

Two entries are worth knowing about. In the Chapter 11 of SilverRock Development Company, LLC in Delaware (filed August 5, 2024), the docket shows a notice of appearance by Construction Loan Services II d/b/a Builders Capital on August 26, 2024 and a limited objection to the debtors' financing motion on September 3, 2024. And in October 2021 BizWest reported that Construction Loan Services II and Builders Capital Finance LLC sued a Colorado builder and a guarantor in Weld County over two loans of $1.965 million and $1.685 million, alleging misuse of funds and default; we did not find how that case ended. A collection suit like this is the other side of the draw story: when a project stalls, a lender with recourse sues on the guaranty.

We did not query state regulators' enforcement databases directly, so the absence of a state order in what we read is not a clearance. On federal complaint data the picture is empty rather than clean: the CFPB database shows no complaints naming Builders Capital or Construction Loan Services (a control search for Kiavi returns 25), and no HMDA filer in 2018 to 2025 carries the name. Business-purpose construction lending mostly falls outside both systems; see how much our ground-up construction guide says federal loan data can and cannot see.

Who funds the loans

Builders Capital says it combines “institutional capital with private lending.” The documents show three layers.

• A minority investor. In April 2024 Builders Capital announced a commitment of up to $500 million of growth capital and a strategic minority interest for InterVest Capital Partners, with a Builders Capital executive saying it had formed “capital partnerships totaling almost $3 billion over the past twelve months.”
• A new capital commitment. On May 12, 2026 BCX announced “more than $2 billion in annual capital from a global institutional partner,” which it said could support up to 5,000 new homes a year. The partner is not named.
• Securitization buyers. Saluda Grade Mortgage Funding LLC (a New York securitizer, CIK 1831646) files Rule 15Ga-1 repurchase reports that list “Builders Capital” as an originator in its trusts. The report for the quarter ended September 30, 2024 shows 14 Builders Capital loans totaling $36,988,138.73 (14.80% of the Saluda Grade 2024-RTL4 pool). The report for the quarter ended December 31, 2025 shows 5 loans totaling $30,421,103 (15.1% of the 2025-NPL2 trust, a trust whose name signals non-performing loans; the report does not say which loans are delinquent). The June 30, 2024 report shows that one loan of $4,748,760.25 from “Builders Capital Wholesale LLC” in the 2021-RTL1 trust was the subject of a repurchase demand and was repurchased or replaced. Saluda Grade's report for April to June 2026 says “No Activity to Report.”

Why this matters to a borrower: the Midvale court summary says the Saluda Grade entities needed to approve loan terms and, as pleaded, were involved in draw decisions; the court noted that a servicer and its capital partner talking daily is “hardly surprising.” Who owns your note can shape how a draw or extension request is decided, so ask. Our CoreVest Finance review shows what a lender's securitization record looks like when it is public.

If you are an accredited investor: what the fund's Form D shows

The premise that Builders Capital funds itself partly with private investor money is supported by one filer, but under a different name than we expected: Builders Capital Opportunity Fund, LLC, a Washington limited liability company formed in 2018. It filed a Form D on January 23, 2019 and amendments on May 20, 2020 and February 24, 2021, claiming the Rule 506(c) exemption, which allows general solicitation if every investor is a verified accredited investor, and an Investment Company Act exemption. The filings say there were no sales commissions or finders fees.

The minimum investment was $100,000 and the securities types ticked were equity, debt and pooled investment fund. The amount sold fell by $5,594,619 between the 2020 and 2021 amendments and investors fell from 53 to 48 (our arithmetic); the form does not say why, and Form D never reports returns, fees, strategy or whether the fund lent to Builders Capital borrowers. At the last filing the fund had sold 72.5% of its $75 million (our arithmetic). Under SEC Rule 503 an amendment is due annually while an offering continues, and EDGAR shows none after February 24, 2021, so either the offering ended by early 2022 or later amendments were not filed; the record does not say which. We found no mention of this fund on the Builders Capital or BCX pages we read, which describe institutional capital. A holder should ask the manager for the current private placement memorandum, the latest audited financials and a list of what the fund holds, and should read the fund documents against the court record above.

Verdict: who Builders Capital fits

For a builder or developer with a repeating pipeline, the record shows a well-funded lender with real scale, institutional partners and a product that matches the pitch: one exposure limit, no deposits, seven- and eight-figure loans. It also shows a live borrower dispute over exactly the two things construction borrowers depend on, draw timing and extension terms, which a court has so far treated as a contract question. For an investor with one lot and one project, Builders Capital says it is not set up for you, and the ground-up lenders in our ground-up construction guide and hard-money lender list are the relevant field. For someone holding a stake in the Opportunity Fund, the public record is thin and more than five years old.

What a borrower can do with this

• Get every fee in writing before you pay for an appraisal. The website gives no rate, point, extension, draw or payoff fee. Ask for the fee sheet and a sample closing statement for a loan your size.
• Read the extension clause as if it were the whole deal. Is the first extension yours by right, at the same rate, with no fee? Or is it subject to “satisfactory progress” judged by the lender? The Midvale dispute turns on that wording and on whether the lender may reduce a draw because a line is only partly complete.
• Ask how draws are decided and how long they take. Line-item or percent-complete, who inspects, who pays, and the turnaround on your last ten draws at this lender. A construction loan is only as fast as its draws.
• Know what you release when you sign an amendment. The amendments quoted by the court say the borrower and guarantor have no claims against the lender for lender misconduct or lender liability they knew about at signing. Have counsel read any extension amendment before you sign it.
• Ask who owns the loan. If a capital partner or securitization trust approves terms or owns the note, find out who makes draw and extension decisions and whom you call.
• Check the guaranty. The complaint describes limited-recourse, carve-out and completion guaranties. Know exactly what you are personally signing.
• Verify the licence yourself. The website prints NMLS ID 1829563 with Idaho and Oregon licence numbers. NMLS Consumer Access blocked our automated lookup, so we could not read it; check it on nmlsconsumeraccess.org and ask which licence or exemption covers your state.

If you are an investor with a single project rather than a builder with a pipeline, these lenders advertise ground-up loans to that borrower; Kiavi is the only one of the three that pays us, and the box says so.

No Builders Capital entity files regular reports with the SEC today, so the alert below follows new SEC filings that name it, such as Saluda Grade reports or a new Form D, and updates to this page.

FAQ

Sources, read October 9, 2026: builderscapital.com (home, about-us, how-we-lend, product-overview, frequently-asked-questions, where-we-lend, the four product pages, brokers and enterprise pages); builderscapitalexchange.com (home, history, people, brands and two news releases dated February 24 and May 12, 2026); SEC EDGAR Forms D and D/A of Builders Capital Opportunity Fund, LLC (CIK 1765377, accessions 0001765377-19-000001, 0001765377-20-000001 and 0001765377-21-000001) and the Form D of Builders Capital SR-01 (CIK 2114159); SEC Forms ABS-15G of Saluda Grade Mortgage Funding LLC (CIK 1831646, accessions 0001999371-24-010179, 0001999371-24-014745, 0001999371-26-002718 and 0001999371-26-017236); 17 CFR 230.503; the docket, First Amended Complaint (Doc. 30) and September 29, 2026 memorandum (Doc. 37) and order in Midvale Commons, LLC v. Construction Loan Services II, LLC (E.D. Pa., 2:26-cv-00128) and the SilverRock Development Company, LLC docket (D. Del., 24-11647) as archived by CourtListener; CourtListener RECAP search results counted by our script; BizWest (October 25, 2021); Informed Infrastructure (April 10, 2024); Newsfile (July 31, 2026); FFIEC HMDA Data Browser filer lists 2018 to 2025; and the CFPB Consumer Complaint Database. Product terms, volumes and licence numbers from the Builders Capital and BCX websites are the companies' own claims. Allegations in court filings are allegations, not findings. Sums, counts, averages and percentage changes are our arithmetic. This is analysis of public records, not investment, legal, lending or tax advice.