Monitoring Loan Disbursements

• Understand Your Loan Disbursement Schedule
• Coordinate with Your Lender
• Track Disbursements and Expenses
• Request Inspections and Appraisals as Needed
• Document Progress and Milestones
• Review Loan Statements and Reconciliation
• Prepare for Loan Draws

Monitoring loan disbursements is an essential part of managing the financial aspects of a construction project. By keeping a close eye on the disbursement of funds, you can ensure that the project runs smoothly and that you're using your loan effectively. You can use a task lists in an EcoHome project, spreadsheets or project management software to help. Here are some key steps to monitor loan disbursements during your construction project:

Understand Your Loan Disbursement Schedule¶

Before the project begins, review the disbursement schedule provided by your lender. This schedule will outline when funds will be released and the specific milestones or conditions that must be met for each disbursement. Familiarize yourself with this schedule so that you can plan your project accordingly and ensure that funds are available when needed.

Coordinate with Your Lender¶

Maintain open communication with your lender throughout the project. Inform them of your progress and any potential changes to the project timeline or budget. Promptly notify the lender of any issues that may affect the disbursement of funds, such as delays or cost overruns. This proactive communication will help prevent any misunderstandings and ensure that loan disbursements occur smoothly.

Track Disbursements and Expenses¶

Use a financial tracking system, such as a spreadsheet or accounting software, to record loan disbursements and project expenses. By tracking these amounts, you can monitor your project's cash flow, identify any potential financial issues, and ensure that you are using your loan funds effectively.

Request Inspections and Appraisals as Needed¶

Some lenders may require inspections or appraisals at specific points in the project to confirm that construction milestones have been met. Be prepared to schedule these inspections as needed and provide any requested documentation to your lender.

Document Progress and Milestones¶

Maintain thorough records of your project's progress and milestones, including photographs, invoices, and receipts. These records can serve as evidence to demonstrate that you have met the conditions for loan disbursements and can be helpful in the event of any disputes or questions from your lender.

Review Loan Statements and Reconciliation¶

Regularly review your loan statements to ensure that disbursements are accurate and timely. If you notice any discrepancies or issues, contact your lender immediately to resolve them.

Prepare for Loan Draws¶

As you approach a milestone that triggers a loan disbursement, prepare the necessary documentation and paperwork for the draw request. This may include invoices, receipts, and proof of work completed. By being prepared, you can help ensure that the disbursement process is efficient and that you receive the funds in a timely manner.

By closely monitoring loan disbursements and maintaining open communication with your lender, you can better manage your construction project's finances and ensure that your project stays on track. This will help you avoid potential cash flow issues and make the most of your construction loan.