Whether you’re a commercial or residential builder or wanting to build your own premises you need to ensure you get the right advice and support when it comes to organising the finance. We are proud to be Australia’s Business finance specialist especially when it comes to finance for the purchase of Commercial or Industrial property.
Why Would You Want to Borrow Money for Construction?
There are many benefits to borrowing money for construction as there are also some points to be aware of:
- It is very capital intensive to fund a full construction from cash flow, particularly when you are getting no return on the property being built during construction.
- If you are constructing a property as a premises or investment, financing the construction gives you greater control over payments to the builder.
- The repayment of the facility can be structured to suit your business cash flow and ensure the facility is tailored to your needs.
- If you are a construction company, there are facilities available to lend against outstanding progress payment invoices which can greatly improve your business’s cash flow position.
Some things to keep in mind:
- You will need to show that you have sufficient capital to meet the difference in construction costs to the amount borrowed from a lender to complete the construction.
- You will often need to supply a fixed price contract to the lender which will then be valued. Any subsequent variations to the contract will generally need to be paid for from your cash reserves or cash flow.
- You should speak to an experienced Commercial Finance Broker such as Edgeview Direct to ensure that any facilities are correctly structured and presented to the lender in the best possible viewpoint.