How can a construction lawyer help you review your finance contract
A financing contract fixes the terms of payment between the construction company and the owner. Any dispute regarding the agreement can be settled in court. If your lawyer oversees the contract, they will check the payment terms against the job requirements and the total value of the project.
The review of the payment terms with the owner is part of the financing contract. Your lawyer should also check the documents you sign if you need to take out a loan from someone before starting the project. Sometimes you may need extra funds to rent a machine that can help get the job done faster. You and the lender will sign a contract to fund the loan. Here are the aspects of the finance contract that your construction lawyer will review:
1. Line of credit
Sydney has strict rules when it comes to carrying out commercial construction projects. As a result, construction companies cannot afford to waste time once they undertake a project. However, some companies do not have state-of-the-art machinery to ensure that workers can complete the job on time. Therefore, owners should rent the latest machines before starting the project. If they don’t have enough money, they can take out a loan from the lenders.
If you are also faced with a similar situation, you should review your loan agreement with a construction lawyer. Construction lawyers in Sydney usually look at your credit limits, the payment terms mentioned in the agreement, and assess the risks you may face when repaying the loan.
2. Project-based contract financing
Contract-by-project financing is suitable if you partner with a financing expert who works exclusively in the construction industry. These types of lenders only give loans to construction companies and help them buy or lease machinery. The advantage of partnering with this lender is that you don’t have to search for other lenders if you are in dire need of money.
Your lawyer will explain the terms and conditions of the contract to you and go through everything so that you don’t have any problems. Sometimes the lender may require prepayment. In such cases, you can get an extension to pay off the full amount later. Again, the lawyer will make sure that you don’t fall prey to the lender’s crooked terms and conditions.
3. Contractual factoring
The contractual factor is another aspect that a construction lawyer should take into account when reviewing your finance contracts. This involves the payment delay, the risks of repaying the loan, and the additional costs you might have to incur if you don’t pay the loan back on time.
Construction lawyers aren’t just for mitigating claims and negotiating claims to settle a case. They also ensure that your lender doesn’t get you into trouble with a contract that can be financially draining on your business.