The big numbers in any development facility are the construction costs. So how do we get our hands on them? Construction costs are funded in arrears, so essentially the developer must spend the money and then claim it back.
That claim is supervised by a lender appointed quantity surveyor, often referred to as a monitoring surveyor. These supervised claims are known as drawdowns.
As mentioned, drawdowns are supervised by a professional appointed by the lender known as a monitoring surveyor. The purpose of a monitoring surveyor is to see that you’re following the timeline and that your construction is at costs rather than behind or in front of the budgeted sum.
The monitoring surveyor will visit the site expecting to see it at a certain stage, and if that stage has been reached and verified by certain elements of paperwork then funds will be released to the client.
This can happen multiple times across a development, usually monthly, but dependent on the cashflow of the scheme it can be every week, every two weeks, or every quarter. Essentially, a developer must be ready and prepared for the visit. Good preparation will assist in a smoother release of funds and no restrictions to cashflow, therein keeping the development ongoing and on time.
A good broker will assist in every element from providing the paperwork to preparing for the visit, and in the case of Word On The Street, attending when the monitoring surveyor comes to see the progress on site.
Solid preparation allows the monitoring surveyor to report positively to the lender which means good cashflow, ensuring you finish your development on time.
If you are interested in finding out more or discussing a requirement for development funding contact the team.
