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August 31, 2022

Gaining Leverage While Lowering Risk in Construction Lending

By AJ Nosek

Leverage typically comes in two forms – financial and power. When a borrower requests a construction loan, they need the financial leverage the loan provides so they can construct (or renovate) buildings to produce a profitable investment. However, once a construction loan is approved, they gain a different type of leverage – one of power that grows as each draw is disbursed. Why? Because no lender wants their borrower to default, forcing them to take back an unfinished property/project.

Today, lenders have options to gain the upper hand with difficult borrowers, which ultimately increases their leverage. This GlobeSt.com article discusses strategies so you can approve more construction loans, gain more leverage to persuade borrowers to comply with loan covenants, and increase your overall confidence that, even if the borrower doesn’t comply, the project will still get completed.

About the Authors

AJ Nosek

National Client Manager

AJ Nosek combines his business background with technical knowledge and experience for managing lender due diligence services with real estate lending clients including SBA, community, regional, and national lenders. He also serves a variety of developers, attorneys, mortgage brokers, CDCs, individual property owners, and municipal clients in physical condition risk assessment. He concentrates on lender policy development, property condition concerns including environmental assessments, construction monitoring, physical condition assessments, appraisal compliance, and lender risk associated with any property type throughout the U.S. and Canada. He has extensive experience with commercial appraisal interagency guideline compliance including review, evaluation, and policy development. The appraisal review services provide qualified, independent, compliant solutions for lending clients, meeting interagency guidelines.

Get in Touch

AJ Nosek
(720) 213-0476
[email protected]

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