Loan-to-Cost Ratio (LTC)

The loan to cost ratio is the ratio of the loan balance to the total cost of the project the loan is financing, expressed by the formula loan balance divided by total cost. For example, calculating a $6,000,000 loan against a $10,000,000 total project costs who result in a loan-to-cost ratio of 60% ($6,000,000 / $10,000,000). Note than the loan-to-cost ratio of a project may differ from its loan-to-value ratio.

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