Whether it is a big or a small construction loan agreement, a sufficient fund is necessary. In this case, applying a loan is one the way to get it. If you are planning on it, especially to the non-government entity, you are required to have well-structured terms. a sample construction loan agreement is the best thing you can learn from. You will get a lot of insight on how to write it properly.
How To Write A Construction Loan Agreement?
There are several steps you have to follow to make a good agreement so the investor or lender trusts that you have a professional working system. The following is a quick guide on how to make it.
- Only use the readable form – It is a must in any formal document that a readable font will help the lender understand your vision and ideas faster. You are trying to get some impressions so begin it from the smallest thing. Jus use the Times New Roman font. And they only use black color. You can use the smaller size just to mention certain things such as terms and conditions. In short, avoid making a reader in difficulty in understanding your agreement.
- Clarification – The terms and conditions are one of the cores of the agreement. It is very important to mention the details carefully. If you are not sure about the language tone in your writing and some important clauses inside, you can hire a lawyer to help you draft it.
Remember to write the terms and conditions properly, in an understandable language and also avoid words that cause misinterpretation. Mention that once the parties have signed the agreement, there is no change because termination will be discussed in the next session. But of course, you can negotiate with the party about how this is supposedly written and works.
- Project details – Next are the project details. Make it clear, simple and fashionable. Make the lender easily evaluate and check your idea. They will also check the funds you are trying to grasp for the project. Besides, try to be honest with the agreement because they will carry out an inspection and check the details, especially with the government contracts.
- Define the legal provisions – Because the agreement you are making is legal, so define the legal terms correctly. This includes the legal provisions and also the financial provisions.
- Explain the dispute resolution – Everyone is avoiding a dispute, but we should make this in the agreement on how we should resolve the dispute. You need to mention the consequences once the agreement is breached. This will allow you to take legal action and also this will prevent each party from disadvantages others by deciding things in the one-side decision.
There are so many sample construction loan agreements you can download for free here.You can pick the one suits you the most. Don’t forget to review your document before asking another party to sign it.
Construction Loan Agreement Sample