Follow These Five Tips to Manage Construction Loans More Successfully
Posted on October 27, 2020
At Fund Control, we are proud to offer a truly advanced fund control option. That said, we have found that the best in the business often focus so much on the complications of their jobs that the basics are glossed over. Today we are here to provide a minor refresher course in five basic tips for managing construction loans.
- Manage Your Risks
- Know Your Critical Stages
- Document, Document, Document
- Use Advanced Fund Control Features
- It’s All About Communication
Whatever else you are focusing on, it is essential to never lose sight of how important it is to mitigate risk. The very business of construction loans involves risk, but that doesn’t mean you have to allow risks to get out of control. The key is to understand what can go wrong, how to reduce the chances that it will go wrong, and having a clear plan of what to do if it does go wrong.
Once you have fully defined your project, make sure you have fully defined your critical stages and what must be done in order to consider them completed. For example, the stages for your construction loan and production could be when subcontractors complete different parts of the project or when draw inspections occur.
There is no question that documentation is the cornerstone of most construction projects. You need documentation at the beginning of the loan process so that you know what the plan is. You need documentation of the final report – and you need documentation of everything in between. At Fund Control, we can help with this. We offer a centralized place to save and access everything you need and everything the builder needs too.
One of the easiest ways to mitigate risks is to invest in advanced fund control software. At Fund Control, we can make it easy for you to ensure that timelines are being met, that projected are begin tracked correctly, and that your funds are being administered correctly.
Many of the issues that come up on construction sites could have been solved with simple communication. The fact of the matter is that it can be overwhelming to tell everyone the things they need to know. For example, if a project manager gets an updated quote for materials, they have many people who need to be informed. This often turns into them informing one person and telling that person to tell the others, and the information never gets passed on.
When you work with an experienced fund control company, we can set up a centralized place for everyone involved to communicate. Not only does this assure that the people who need information have access to it, but it creates a record to easily settle disputes or be reminded of key information.