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. Here we see some of the issues going into this such as the requirements from both parties, that is fund and the contractor and the various sources of finance.
To begin with, we are going to see some of the bare basics about the contractor funding basics, here talking of the way the loans work, the costs that are involved and the factors that a lender will use to make a decision. To find out more about this product as is offered by this company, see here.
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. Instead the funds will be released in tranches, meaning they will have to serve two separate periods of loan usage, with each period being weighed at a different level of risk. For more on this service, click here.
But all in all, the first phase is where you are given a construction loan. This is the fund you are going to use to finance all activities during the construction. After this, comes the second phase of the loan and this is where you are advanced the permanent loan. This is the share of the contractor fund that you will make use of to finance all the after construction needs and time frame. For more on these contractor loans, view here for more as we have them detailed.
Like we have already seen mentioned above, a construction loan is a loan that will cover all the necessary costs you will need for the upfront and during the construction. The interesting bit with it is the fact that with it, one will only be required to make interest only contributions back to the fund for as long as the time period for the construction project has not lapsed. Looking at this, what we see with it is the fact that where you pay these as is due, when your construction project is finally done, all you need to do is to pay the principal value and any balance of interest there may be.