The position in two pages
What the price covers, what it does not, and what the difference is worth, written to be read in full by somebody with eleven other papers.
Why it happens
Why a construction lender independent review is written differently
The findings are the same as in any review. The order and the vocabulary are not.
Committees read exposure
A register written for a builder lists items. A committee asks what the exposure is, what it is worth and what condition would reduce it.
The borrower wrote the budget
The budget in a loan package was assembled by the party asking for the money. An independent reading is the only one without that interest.
Conditions cost less early
A holdback or a drawdown condition costs the borrower one negotiation before approval. Asked for afterwards, the same condition needs a waiver.
Why owners take this one
The audience decides the document, not the findings
A construction risk register is written for somebody who knows what a schedule of values is. A credit committee does not, and should not have to. Hand them the register and one of two things happens: the committee approves something it did not understand, or it stalls on a question that was answered on page four in language nobody read.
This is not a separate review. It is the same findings, ordered the way a financial reader asks for them: what is the exposure, what is it worth, what is the probability, what conditions would reduce it, and what happens if nothing is done.
It can be commissioned on its own before capital is approved, in which case we read the borrower documents first, or written from the findings of a review we have already run. Either way the memo rests on documents we have read.
Turnaround
Five working days after the underlying review. Fees are quoted per project once we have seen the documents, never as a percentage of what the review finds.
What is in it
What you get, item by item
Exposure as a number
Every item carries a dollar range and a basis. Words like significant, material and substantial are not quantities, so they do not appear.
Conditions worth attaching
The covenants, holdbacks and drawdown conditions that would reduce the exposure, named while they still cost the borrower a negotiation.
Construction terms removed
No schedule of values, no float, no buyout gap. The mechanisms stay, the vocabulary goes, and nothing is softened in the translation.
The full register attached
The full technical findings sit behind the memo as an appendix, so that the one person in the room who does want the detail can have it.
Sourced page by page
Every figure cites the borrower document and the page it came from, so a credit reader can check any line without having to call us first.
Where it stops
What this package does not do
What a package is worth depends as much on what it refuses to do as on what it covers, so the limits are on the page rather than in the engagement letter alone.
Not a recommendation to lend
We do not advise on credit. The memo gives the committee the facts in the order it asks for them and stops there. The decision is the committee’s.
Not a credit opinion
It states the exposure and the conditions worth attaching, and it rates nothing. Whether and on what terms to lend remains the committee’s decision.
Not a reliance letter
If a lender, a fund or an investment committee needs to rely on the work, that is arranged separately and in writing, addressed to them by name.
How it runs
From the documents to the decision
We work back from your date rather than quoting a duration and letting you discover the collision later.
After the underlying review
Five working days after a review we have run, or two to three weeks when it is commissioned on its own against the borrower’s documents.
Drafted to the audience
Tell us who reads it: a construction lender, an investment committee, a family office board or a partner. The structure changes, the findings do not.
A call with the committee
We will take the questions the committee raises, with you present. We answer on the findings, and we do not advise on the credit decision itself.
Before you commission it
Questions owners ask
If the answer to any of these decides whether the package is right for you, ask us before you commission it rather than after.
Can our lender rely on this memo?
Not automatically. A memo addressed to you is written for you. Reliance by a lender, a fund or an investment committee is arranged separately through a reliance letter naming them, because reliance changes who we owe a duty to and that has to be written down rather than assumed.
How long is it?
Two pages of position, plus the ranked exposure table, plus the underlying technical register attached as an appendix. The two pages are the product and they are written to be read in full. The appendix exists so that the detail is on the record and available to the one person who wants it, not because we expect the room to read it.
We already have a monitoring surveyor. Is this the same thing?
No, and the two are complementary rather than competing. A monitoring surveyor reports on progress against drawdowns once construction is under way. This reads the price and the contract before signature and states what the exposure is while it can still be negotiated. Different question, different moment, and most lenders eventually want both.
Can you present it to the committee?
Yes, with you present, either on a call or in the meeting itself. We answer questions on the findings and on how we reached them. We do not advise on whether to lend, invest or approve, and we say that in the room as plainly as we say it here, because a committee that mistakes us for a credit adviser is a problem for everybody.
What you end up with
What the committee approves against
Two pages of position, with the detail behind them.
The exposure in dollars
Every item with a dollar range and a basis, set out in the order a credit reader asks for it, with the document behind each.
Conditions worth attaching
The covenants, holdbacks and drawdown conditions that would reduce the exposure, named while they can still be negotiated.
Alone or after a review
Commissioned on its own before capital is approved, or written from the findings of any review we have already run.
Two pages a committee can act on, with the detail behind it.
Compare the four
Three
See all four side by side
The four packages draw on the same modules and the same method. What changes is scope, speed and who the memo is written for.
Written from the same desk
Three notes behind this package
Short pieces on the mechanisms this package is built to catch, written from the owner side of the contract.
The other three
Bought in four different shapes
Every package runs the same method and the same registers. What changes is how much of it runs, how fast, and who the document has to survive being read by. The packages overview sets the four against each other, and the four modules describe the work itself.