Yes, with conditions. On-site stored materials fund at 100% of invoice less retainage . Off-site stored materials at a bonded supplier fund at 80%-90% of invoice subject to (1) segregated identified inventory, (2) bonded storage, (3) insurance with lender as loss payee, and (4) bill of sale evidencing title.
Why stored-materials funding matters to schedule and cash flow
Long-lead items, switchgear, elevators, HVAC equipment, custom millwork, often require purchase six to twelve months before installation. Without stored-materials funding, the sponsor either pre-funds these out of equity (a working-capital drag) or risks schedule delay if the GC delays orders to align with installation timing.
Standard institutional funding: on-site stored materials fund at the same percent as installed work less retainage; off-site stored materials at a bonded supplier fund at 80% to 90% of invoice with the same retainage hold-back. Some lenders require a third-party site visit to the off-site storage location to validate the inventory.
Documentation requirements: bill of sale or invoice from the supplier, warehouse receipt or bill of lading evidencing the lender's protected interest, certificate of insurance naming the lender as loss payee for the stored value, and segregation of the materials so they are clearly identifiable as belonging to the project.
Negotiate stored-materials terms at the loan-document stage. The default lender draft often only allows on-site stored materials; a sponsor-friendly draft expands to off-site at bonded suppliers and to fabrication shops with a cleared insurance certificate. The latter expansion can compress the project schedule by months on long-lead-heavy projects.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Semiannual Risk Perspective · Office of the Comptroller of the Currency · 2025-12