With escalating build costs, delays obtaining materials and softening property values the development sector is once again facing a raft of challenges that are effecting the bottom line. This volatility and uncertainty is having an impact on finance and lending with variations to time and cost quite common.

So how is this affecting the lending markets and what sorts of responses are lenders putting in place to protect themselves and their clients? Let's discuss all this and more with previous guest Fabian De Marco from Commercial & Construction Capital.

We cover:

- changes in private capital markets

- lenders reviewing /adjusting maximum loan to value ratios

- length of loan terms being reviewed/shortened

- interest rates changing from fixed to variable (not seen in the last 3-4 years)

- some lenders increasing percentage of contingency funds required

- the listed builder on a project is under more scrutiny from lenders than ever before

- feasibilities may no longer stack up so what are developers doing in this situation?

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Links

C&C Capital - https://www.cccapital.org

Episode Summary

The construction finance process involves identifying the right financing options, setting realistic budgets and timelines, monitoring cash flow, and managing risks. In today's dynamic market, developers need to stay informed about the latest trends and best practices in construction finance to make the most of their investments.

Financing Options

The first step in the construction finance process is identifying the right financing options. Developers can choose from a variety of financing options, including bank loans, private equity, and mezzanine finance. Each option has its own advantages and disadvantages, and developers need to consider factors such as interest rates, repayment terms, and loan-to-value ratios when choosing the best financing option for their project.

Realistic Budgets and Timelines

Setting realistic budgets and timelines is critical to the success of any construction project. Developers need to create a detailed budget that includes all construction cost...