Construction Loan Administration and How it Can Help You

By March 25, 2022Blog

What is Construction Loan Administration?

Construction loan administration is now a vital part of the construction lending process. Whether a bank’s construction lending portfolio is big or small, managing the risk of your portfolio is vital to success.

Although many financial institutions prefer to keep their construction loan administration in house, a growing number are utilizing digital tools to help their staff become more efficient. 

This process includes some or all of the following:

– Reviewing and approving borrower’s construction loan application and related documentation.

– Processing payments to contractors and subcontractors.

– Monitoring progress.

– Disbursement administration.

– Closing out the construction loan.

– Reporting for all parties.

Why You Need an Administration Service for Your Construction Loans – 3 Important Benefits

Construction loans typically have several parties involved. Construction loans are usually long-term and require a lot of documentation to be submitted to the lender by stakeholders. This is where an administration service comes in handy for construction loans.

The benefit of an administration service is that it will take care of all the tedious paperwork. A digital tool benefits financial institutions even more by offering a seamless updated process. Instead of going back to the office to submit an inspector, inspectors can submit documentation on their phone or tablet right from the construction site.

There are three benefits that come from using an administration service for your construction loans:

– It takes care of all the tedious paperwork for you, which would otherwise be time-consuming and difficult. This speeds up your cycle time which increases draw interest income.

– It streamlines the process so errors are minimized.

– It keeps the funding cycle moving, notifying each party when an update has been submitted.

– It offers each participant individualized reports that can be customized to their role and needs.

Essential Requirements of a Construction Loan Management Software

The construction loan management software is a system that helps lenders manage their financial transactions.

The best construction loans management software should be able to solve the following problems:

– It should be able to generate highly customizable reports.

– The user interface and navigation should be easy to use.

– It should provide real-time updates on the current status of payments and loans.

As a lender, it can be difficult to keep track of your contracts, invoices, and payments. That’s why we’ve developed Construct – the world’s leading construction loan management software. With its robust features, it’s easy to create a personalized contract management system that will save you time and money. Best of all, it works with your core system and other software.

Simplify Managing Construction Loans

The manual construction lending process is inefficient and prone to errors. Our solution, Construct, simplifies the process of managing construction loans. With a single software platform, lenders can originate, track, manage, and close any type of construction loan from start to finish.

Traditionally, construction lenders have to manage the workflow themselves, which includes making sure that the right documents are submitted at the right time and coordinating paperwork with the borrower and other parties. With Construct, all lenders need to do is upload their docs and get a complete dashboard of their construction loan. Construct also has a powerful dashboard for builders to manage their projects. It’s as easy as logging in at any time to view progress on a job, submit changes or request approvals.

Increase Draw Interest and Efficiency

Lenders are always looking for ways to manage their risks and provide more efficient services. A large part of the process is drawing interest from clients that want to finance their next project. The problem is, lenders spend hours coordinating projects, which can extend the drawing process by days. That’s where our solution comes in. Construct helps lenders draw more interest in less time and make more efficient deals by automating the process.

We developed a system to automate the process of managing construction loans. Our platform provides lenders with an automated system to manage all the necessary documents, calculations and reporting so they can focus on what matters most – serving your community. No more manually calculating interest, no more uploading documents one by one, no more copying and pasting data from one form to another. The age of spreadsheets is over.