Loan to Cost, or "LTC", is a term commonly used in construction financing in which the Cost is representative of the total cost of the project (Land and Construction Costs). 

Calculating LTC:

Cost = Price of Land + Construction Costs

Loan = Total Bank is Lending for the Project

LTC = Loan / Cost

Example

Let's Say a well known car dealer plans on building a new dealership. He already owns outright the plot of land on which the building will be built. The land is worth $2M. He then contacts a a contractor who estimates it will cost $8M to build his fancy new dealership. So the total cost of the project using our above Cost equation is:

$10M(Cost) = $2M (Cost of Land) + $8M(Cost of Construction)

So we are looking at a total cost of $10M

He is willing to put another $1M of his own money into the construction of the project and subsequently will need the remaining $7M from a lender.

His LTC will be:

70% (LTC) = $7M/$10M

Acceptable LTC Ratio's

Much like its more commonly used cousin LTV, banks prefer that the LTC be 80% or below. However, like LTV's, banks will work with LTC's above 80% if the borrower has an outstanding track record of building viable and equitable properties. Having a substantial bank balance will not hurt either.

Bankapedia's Take

LTC is really an indicator of how much of the borrowers own cash they are willing to risk. The more the borrower has in the project, the more the bank is willing to lend.