Construction contracts have a tangible impact on the project’s risk to the lending institution. And unfortunately, not all construction contracts are created equal. When performing due diligence on a construction loan, lenders should always require a construction contract review as part of an overall plan and cost review (PCR). At GLE, we review hundreds of…
Construction projects carry risks for everyone involved, from the owner to the general contractor to the lender. Good construction funds control is one of the ways that lenders mitigate financial risk during the construction process, and ensure a successful and on-budget project. What Is Construction Funds Control? Construction funds control is the process by which…
When it comes to construction loan consulting, many banks still operate on a one-off basis, with each individual branch or loan officer hiring whichever local contractor or consulting firm they prefer. This can work fine for small banks, but if your organization’s book of business spans beyond the geographic footprint of a few branches, you’re…
When you hire a contractor to conduct renovations, repairs, or to construct a new facility, many property owners and managers know that the contractor should be required to bond the project. But what exactly does it mean for a contractor to bond a construction project, and why should you care? Contractor’s bonds mitigate owner risk…
For lending institutions, issuing a construction loan presents unique and substantial risks, from the contract phase to pre-construction, construction, and final payment. And, due to the nature of long-term lending and property ownership, those risks don’t end just because the construction project does. Successful lending relies on the lender’s ability to manage and mitigate those…
