Contractor Funding and How to Have Your Construction Projects Financed
If at all you have a large construction project underway, you will definitely require contractor funding for you to have your large and expensive construction project. By and large, one thing that is to be noted as a fact is that acquiring financing for large construction projects isn’t as easy and simple as one may be led to think. For more on construction funding and how to finance your large construction projects, see this website. In this post, we will as well see some of the issues of these basics about contractor funding, such as the requirements from both parties and the different sources of finance like we have detailed here.
We first start by taking a look at the basics about contractor funding, that is how it works, the costs there are in it and the metrics that a lender will make use of to make a decision. View here for more about this product offered by this company to learn more about it and find out more info.
Looking at the basic principles of the whole idea of contractor funding, the most basic of these that you need to know of is that it is a double-fund. In this what we see is the fact that one looking for the funding will not receive all their funding at once. Rather, this is where we see the funding being given in two phases, essentially meaning that one will have to serve two separate periods of loan usage and each of these phases being calculated at a different risk level. For more on this service, click here.
What will anyway come first as you go for these loans is the construction loan. This is the fund you are going to use to finance all activities during the construction. Then this is followed by the permanent loan. This is the part of the fund that you will use for funding the after construction needs. For more on these contractor loans, view here for more as we have them detailed.
Bear in mind the fact as we have mentioned above that a construction loan is one that covers all the necessary costs that will be called for, up-front and in the course of the project. With this particular type of funding, you will be allowed and expected to only make interest only payments for as long as the construction project is still underway. As such, when you pay these well enough, all you will be left with to pay after the project is done is to pay the principal value plus any leftover interest.