A Construction Finance Initial Report, also known as a Construction Budget Report, Pre-Construction Report, or Pre-Con, plays a crucial role in obtaining approval for a construction loan facility from project financiers before commencing construction work. This report aims to identify and address potential project risks by developing and documenting effective mitigating strategies.
As Quantity Surveyors, we take on the responsibility of assisting lenders in their due diligence process, representing the interests of the financiers.
In this blog post, we will deep dive into some aspects we take into consideration:
- Project documentation: we analyze architectural plans, S4.55 applications, and relevant documentation to assess the feasibility and compliance of the project.
- Contractual and legal aspects: our team carefully examine the building contract and its clauses, guaranteeing their conformity with industry norms and legal obligations. Additionally, we assess project insurances and ensure that the professional indemnity insurances of consultants meet the necessary standards.
- Construction programme and cashflow forecast: through careful evaluation of the construction programme, we examine its viability, timeline, and how it aligns with the project’s financial aspects. Furthermore, we analyse the cashflow forecast to determine the financial feasibility of the project.
- Technical reports: we review geotechnical and structural reports to evaluate the stability and integrity of the project’s foundation and structure.
- Pre-Sales analysis: we examine pre-sales data to gauge the market demand and validate the developer’s projected revenue.
- Construction budget: we vet the Builder’s budget against our own assessment of the construction budget. This then forms part of the loan facility and is relied upon throughout construction to assess the progress claims.
Why Choose Archi-QS?
Archi-QS has been trusted by major and minor banks and financial institutions for over three decades. Our Construction Finance Initial Reports have set an industry benchmark and align with the reporting requirements of the Australian Institute of Quantity Surveyors (AIQS). By choosing Archi-QS, you benefit from:
- Expertise and professional judgement: we act as the eyes and ears of every new development for financiers, providing expert judgement and insights to ensure the success of your project. Our team of experienced Quantity Surveyors possesses extensive knowledge in construction finance, enabling us to deliver accurate and reliable reports.
- Timeliness and efficiency: understanding the criticality of project cashflow, we prioritize efficiency in our services. Upon completing a site inspection, we can turn around our reports within one to two days, providing you with the essential information you need to move forward with confidence.
- Risk mitigation strategies: we recommend mitigating strategies to any identified project risks.
- We know what it takes to get the project over the line: we know that project feasibility in the current industry climate isn’t easy. So we know how to ensure the project will reach fruition without breaking the bank.
- Care and friendly service: our clients are part of our family, and we treat every project as if they were our own. You can relax and trust us to take care of everything.
The Construction Finance Initial Report plays a vital role in the lending process for construction projects. With our expertise, you can confidently navigate the financier’s requirements and set the foundation for a successful construction venture.