Expert Due Diligence
What is due diligence in fund control?
In general terms, due diligence is the process of scrutinizing an investment before venturing into it. It involves an investigation or review to confirm the facts of a matter. In a commercial lending transaction, due diligence requires an examination of financial records, plans and documents before issuing and approving a construction loan.
Due diligence begins when a borrower executes a lender’s term sheet. In order to further reduce risk, lenders will partner with a fund control company. The goal of due diligence by the fund control company is to help the lender validate the sufficiency of project costs that have been submitted for underwriting.
When delivering due diligence in fund control, QuickDraw Fund Control takes every precaution necessary by researching the borrower and general contractor and visiting the borrower’s project site with the goal of reducing the lender’s risk.
Drawing upon the combined construction expertise of its seasoned team, QuickDraw Fund Control offers an unbiased project analysis based upon the borrower’s budgets, blueprints and project documents. In essence, QuickDraw Fund Control joins in the larger scope of the underwriting process to provide specific details on the construction budget, scope of site and building improvements and the proposed construction schedule. Lenders receive a comprehensive evaluation of the borrower and project, allowing them to proceed with a construction loan knowing that they are making a sound credit decision.
A Strategic Approach
To succeed in its assisting role during underwriting, QuickDraw Fund Control employs strategies on multiple levels. These macro strategies provide a high-level overview, in conjunction with determining and reporting precise, site-specific details of the construction project’s requirements.
Two of the most common due diligence services QuickDraw Fund Control offers are:
- Loan Portfolio Review; and
- Cost Review and Analysis
A Loan Portfolio Review is a review of the lender’s entire portfolio of construction projects. QuickDraw Fund Control examines and reports each project’s progress, cost to date and forecasted completion dates.
A Cost Review and Analysis is a review of the project budget provided by the lender’s borrower. QuickDraw Fund Control provides validation for the sufficiency of the proposed project costs.
Aiding in the oversight of millions of dollars in dispersed loans each month, QuickDraw Fund Control has ample experience in performing due diligence services for both lenders and borrowers. QuickDraw Fund Control’s large community of satisfied and repeat clients span a variety of construction projects, demonstrating its merit as a reliable, trusted and valuable fund control company.