Structuring a Construction Loan

Structuring a Construction Loan
Corporate Finance Institute (CFI) on-demand courses are designed for finance professionals and industry practitioners who want to master the art of corporate finance. The courses move through three levels of mastery for anyone looking to be an expert in financial modeling, valuation, and financial analysis. Participants typically include professionals in entry to mid-level positions in financial planning and analysis (FP&A), corporate development, treasury, investor relations, and capital markets. All participants are automatically issued certificates of completion after successfully finishing each course.


NOTE: Course login details are normally sent to registrants within one week from date of registration.

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This Structuring a Construction Loan course dives into the factors that affect the structure of a loan for construction and real estate development. In this course, we break down the line items of a construction budget and proforma. We then look at how to calculate the interest expense and maximum loan amount on the construction loan by examining the timing of spend of different line items from the construction budget.

We also examine quantitative and qualitative terms in the term sheet and how they affect the structure of the construction loan. Finally, this course builds out different construction development scenarios and looks at how loan repayment works in all these scenarios.

LEARNING OBJECTIVES:
Upon completing this course, you will be able to:

  • Understand the line items in a developer’s budget and derive a risk-assessed loan-to-cost
  • Review development and construction cash flows to calculate interest and financing fee values and funding mechanisms
  • Determine how the price of debt ties into the budget and project evaluation
  • Appreciate how qualitative loan terms can impact loan-to-cost and interest rates
  • Calculate various take-out scenarios
  • Examine how mezzanine debt and promote structures may fit into the total project assessment
CPD- 2 Hours
When
4/1/2022 - 3/31/2023 11:59 PM
Where
On-demand