5 Things to Look for in a Great Construction Loan Borrower

5 Things to Look for in a Great Construction Loan Borrower

5 Things to Look for in a Great Construction Loan Borrower

Posted on August 21, 2019

5 Things to Look for in a Great Construction Loan Borrower

As you look at whether or not to approve a loan to a construction borrower, there are likely internal controls your company has in place. However, we find that these controls are not always consistently followed. We also find that in some cases they can actually complicated the process of approving or denying a buyer. We suggest looking at the five follow factors when deciding on a loan.

  1. You Want a Borrower Who is Organized and Has an Attention to Detail
  2. When you find a potential borrower who is serious about doing a great job, it is likely that they will be organized and have a strong attention to detail. This does not just mean having paperwork in order. Consider their employee’s schedules and history of supply ordering. If they are on top of the ball and invest in the latest software to help them out, then this is a good sign.

  3. Look for a Borrower Who Has Subcontractors Set Up
  4. If a contractor is still accepting bids then they are not ready to get started on the job. You want someone who, as soon as you release funds, is going to be able to begin the project. The longer the gap is between the date you release funds and they are ready to begin, the more can go wrong and the greater your risk may end up being.

  5. Look at the Job Site
  6. If the job site is already set up, take a look at it. It is clean? Is it well-organized? If so, this is a good sign that you are working with a contractor who is doing good work, who takes pride in the work they are doing, and who will similarly take pride in paying their loan on time.

  7. Adherence to the Job Timeline
  8. Anyone who has worked in the world of lending for more than five minutes likely understands that time is money in the world of lending. If you have a contractor that can adhere to the job timeline perfectly, and keep all aspects of schedule, this means they are likely to close the project on schedule – which means you are likely to get paid on time.

  9. Proactiveness
  10. It is not enough that a contractor know how to respond to a crisis – they should also be able to anticipate a potential crisis and have a plan in place in advance. This is easy to discover – ask them questions about not just what they will do in the future but they will do if specific issues become relevant.

At Fund Control we have worked to create the best possible software that can help you do your job. Call us now at 800-625-5972 or reach out online to get your free demo.