{"ok":true,"canonical_url":"https://dealroom.so/glossary/construction-contingency-reserve","api_url":"https://dealroom.so/api/public/glossary/construction-contingency-reserve","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"construction-contingency-reserve","term":"Construction Contingency Reserve","group":"The loan itself","definition":"This is a portion of loan funds set aside specifically to cover unforeseen costs or delays that may arise during a construction or renovation project. It's a mandatory safeguard for such projects.","what_it_means":"For 7(a) loans involving new construction or significant leasehold improvements, your lender will typically require a construction contingency reserve, often 10-15% of the construction costs. This money is part of your total project costs but is held back by the lender and disbursed only for approved, unexpected expenses. Factor this into your overall budget.","url":"https://dealroom.so/glossary/construction-contingency-reserve","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"slug":"leasehold-improvement","term":"Leasehold improvement","url":"https://dealroom.so/glossary/leasehold-improvement"},{"slug":"owner-occupied-commercial-real-estate","term":"Owner-occupied commercial real estate","url":"https://dealroom.so/glossary/owner-occupied-commercial-real-estate"},{"slug":"use-of-proceeds","term":"Use of proceeds","url":"https://dealroom.so/glossary/use-of-proceeds"}],"related_questions":[{"question":"Can an SBA 7(a) loan include funds for a cash reserve to cover initial operating losses?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-include-funds-for-a-cash-reserve-to-cover-initial-operating-losses"},{"question":"Can an SBA 7(a) loan cover construction or renovation of a business property?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-cover-construction-or-renovation-of-a-business-property"},{"question":"Can an SBA 7(a) loan be used for construction or renovation of business property?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-for-construction-or-renovation-of-business-property"},{"question":"Can an SBA 7(a) loan be used to buy a commercial building currently under construction?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-buy-a-commercial-building-currently-under-construction"},{"question":"Can I use an SBA 7(a) loan for construction or renovation of a business property?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-for-construction-or-renovation-of-a-business-property"},{"question":"Can I use an SBA 7(a) loan to finance renovations or new construction for my business?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-finance-renovations-or-new-construction-for-my-business"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Construction Contingency Reserve","url":"https://dealroom.so/glossary/construction-contingency-reserve","source_type":"DealRoom Data"}}