How can Fund Monitoring offer a solution?
The benefits of a thorough fund monitoring service impacts both the developer and the lender. Engaging a fund monitoring service with the right provider, encourages the developer to be open and transparent with their costs and provides the lender with the security of knowing the funding is being allocated in the correct way.
What precautions can you take on a project?
We would advise our clients to look at de-risking the scheme wherever possible, the vesting of materials off site can often do this. Another of my recommendations would be having materials delivered at an earlier stage in the programme rather than using a ‘just-in-time’ approach. Although you may pay additional costs for storage, you will have surety that materials can be called off when you need them. Other benefits include the mitigation of the risk of any potential cost increase and the product being unavailable.
This is just an example of an initiative that could be implemented to ensure the clients risks are reduced. When looking at development finance, it is important to make sure these risks are considered properly and to plan to reduce or remove them where possible. Currently build values are increasing higher than the value of development, so ensuring viability of a scheme for all parties is paramount to keeping the industry going.