Everything You Need to Know About Fund Control
When it comes to new construction, managing invoices and payments during the course of the project can be arduous work. As new construction continues to increase, this makes having a third-party fund control partner more important than ever.
Ultimately, the advantages of fund control service include reduced overhead costs, increased bottom lines and mitigated construction risk. A fund control provider will oversee these important tasks and essentially act as an intermediary between the lender and the borrower (contractors/builders). Lenders choose to work with fund control companies like QuickDraw Fund Control because it helps facilitate smoother and faster transfers of funds while a construction project is in process.
In this article, we will review everything you need to know about fund control.
The Fund Control Process
It all starts with a fund disbursement schedule that is reviewed and approved by all parties involved. This schedule is based on the construction budget outline and it essentially breaks down when payments need to be received by the borrower to proceed with each new phase of construction (typically once a previous phase is completed). The borrower will then submit draw requests that ultimately need to be approved by the lender before the next set of funds is released. A third party fund control partner is vital during this phase as the following steps will take place:
1. Reviewing the Draw Requests and Supporting Documents
Once the borrower submits a draw request, all the documentation is reviewed in order to validate the validity of the requests.
2. Construction Site Inspection and Progress Reporting
On-site inspections are performed by the fund control company to make sure that the project is proceeding according to the schedule. Inspection reports are performed (complete with photo documentation) to verify that specific milestones have been reached and the draw request is valid.
3. Approving the Draw Request
Once the draw request has been validated, the funds are approved for disbursement from the lender to the borrower.
Most lenders and investors will be involved in multiple construction projects and just don’t have the time or resources to handle the necessary fund control processes. QuickDraw specializes in fund control services, acting as a trusted intermediary that protects the best interests of both the lender and the borrower throughout the entirety of a construction project.
To learn more about QuickDraw Fund Control and our fund control process, cost analysis and site inspection services, contact us today.