The wheels of construction loan administration often turn slowly, but Colorado Federal Savings Bank (COFS) has earned a reputation as "The Builder's Lender," by understanding that not every tier of the development hierarchy can afford to wait for funding.
General contractors need access to loan funding on a much more expedited timetable than most traditional lenders can offer.
Two members of the COFS team, loan officer James Paris and AVP of construction loan administration Breanna Milanovich, sat down with Bisnow to explain their bank's unique relationship with builders.
Bisnow: Why are expedited loan draws so necessary for general contractors? Is even a week too long to wait for funding?
James: Subcontractors need to get paid promptly if general contractors want to keep their projects on schedule. The workforce can’t wait three weeks or longer to receive a paycheck.
General contractors/developers may find themselves laying out anywhere between $100k to $200k at any given time for a project while they wait for the loan draws to be approved and funds to be transferred. At COFS, we aim to make that juggling act a thing of the past.
Bisnow: What does COFS do differently to expedite the process?
James: We made the decision early on to keep loan administration in-house. We took our time developing the department and making sure it would run smoothly, and now it’s an efficient, effective operation.
When COFS receives a draw request, we begin making internal steps towards approving the request immediately, whereas other lenders may wait for third-party verification to be confirmed before taking those steps, directly resulting in delays.
Because we handle everything within our own company, if a borrower calls us on Monday, they are going to receive their funds by Friday. Other lenders might have to wait for outside entities to approve various steps. That can delay the general contractors and prevent them from getting the money they need to buy materials or pay subcontractors.
Breanna: We believe if we don't deliver on the origination side or the administration side, the potential for return business and retention of that account goes down.
We take a relationship manager, single point of contact approach on our side as well to make things as simple as possible.
Clients have told me that the lending process has been smoother with us than at other banks.
Bisnow: What else is the COFS team doing to make them the go-to lender for general contractors?
Breanna: What we offer is a symbiotic relationship with the builder.
We have access to licensed general contractors in-house. These individuals can get on a phone with a client and walk through the loan process with them while understanding the intricacies of their individual needs.
It gives us an advantage. Our lending professionals are financial experts but they may not understand the subtle nuances and everyday issues that those on the construction site deal with.
When a client does business with us, their unique needs are understood and typically, their financial responsibilities can be met in an efficient manner.
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