When it comes to construction loan consulting, many banks still operate on a one-off basis, with each individual branch or loan officer hiring whichever local contractor or consulting firm they prefer.
This can work fine for small banks, but if your organization’s book of business spans beyond the geographic footprint of a few branches, you’re better off hiring a firm that can work throughout the country to handle all of your plan and cost review (PCR) and construction consulting needs. Here are 6 reasons why.
When you hire the right national firm, you get a single name, phone number, and email address to handle all of your PCR and construction inspection requests, regardless of where the project is located. Beyond its simplicity, the single point of contact provides the benefit of accountability. When construction issues arise, or if there’s a question or delay, you know where the buck stops, and you are communicating directly with the person who will get the problem solved.
In addition to a single point of contact, a national firm can manage all of your PCR and other construction consulting needs in a coordinated fashion. A national firm will be comprised of individuals with specific training and experience in the construction loan monitoring process. For the national firm, it’s not a part-time job. Given the complex coordination of information required to properly monitor a project, this experience translates to a seamless, consistent, professional experience for you, with the confidence that all crucial elements of the construction process are reviewed/inspected.
A simple construction monitoring project may require only the expertise of a single person, but larger complex construction projects can benefit from the eyes and ears of experts across multiple disciplines, including architects, civil and structural engineers, mechanical and electrical engineers, as well as seasoned construction contractors and estimators, a benefit that is most easily provided by a large firm with many coordinated departments.
In addition to complexity, many construction projects have specific needs related to the intended use of the facility. When your borrower wants to build a hospital, you want to be sure that the construction consultant understands the needs of hospitals. The same goes for churches, laboratories, multi-family residential projects, educational facilities, retail facilities, and any other specific type of construction. With a national firm, you gain access to multiple experts with decades of experience, to ensure that your PCRs and consulting inspection services are provided by someone with specific expertise in your project type.
Many small local consulting firms may lack the types and levels of insurance necessary to protect your interests. Some may not even have the minimum insurance levels required by your institution. With a national firm, you can expect that they will carry the levels of insurance necessary to protect your assets.
While a small local consulting firm may be able to get on site promptly, in many cases their small staff may be tied up when you need them. A national firm has the ability to pull resources from across their network to ensure you get the information you need to meet your funding deadlines.
Are you still using a scattered network of independent providers for this critical component of your lending due diligence? If so, maybe it’s time to call GLE and find out how we can be your single construction consulting source, save you time and money, and help you better manage your risk.