Construction Finance

Construction Finance

Real Estate is India's rapidly developing business segment and multiple financial institutions including banking and non banking are offering Loans for New Construction i.e., construction finance under project finance / loan.

Loan sanctioned to construct or develop a new real estate project including both residential as well as commercial is known as Construction Loan under Project finance department. An individual or a firm or company engaged in the business of real estate development or construction (Builder) can avail this construction finance under Project finance / loan department.

Project finance / Construction Finance is the long term financing of infrastructure based upon the projected cash flows of the project rather than the balance sheets of the project sponsors. This Construction loans / finance are most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow. This Construction finance is typically secured by all of the project assets, including the revenue-producing contracts. Project finance lenders are given a lien on all of these assets, and are able to assume control of a project if the project company has difficulties complying with the loan terms.

CFPL are specialized in Arrangement of Project Finance to Builders & Developers through banks and financial institution which CFPL has developed through trust and experience over decades.

Customizing our services to your unique requirements, we will develop and execute a financing that will maximize the economic value of your project. Project finance is the long term finance based upon the projected cash flow of the project.

CFPL offers customize service to customers according to their requirements based upon their projects and experience.

• No private Investor Required

• Better rate of Interest

• Financial Support

• No Extra collateral required

1. Project Report.

2. Company Profile.

3. Valuation & legal Report.

4. Evaluation Report on Format.

5. Past & future Projection.

6. Credit history of the client.

7. Documentation.

8. Personal Discussion with the client.

To qualify for a Construction Finance, most of the lending institutions in India require you to be:

  • An Indian resident.
  • Above 21 years of age at the commencement of the loan.
  • Age Below 65 when the loan matures.
  • Seasonal Builder with minimum 3 project or 1 lac sq ft.

Construction Finance Documents can be classified in two Parts

Property Documents -

1. Project Report

2. Evaluation Report on format

3. Legal & Technical verification

4. Company profile

5. Past & future Projects

6. Property Related Documents

Financial Documents-

1. 3 yrs Financial of the firm(complete set)

2. 3 yrs individual financial paper(Director/Partner/ Proprietor)

3. One year bank statement of the Firm

4. One year bank statement of Director/partner/ Proprietor

5. All loan sanction letters

6. KYC of the firm(Gumastha Licensce/Registration certificate)

7. KYC of the Partners/Directors/Proprietor

8. Directors Report if PVT LTD

9. Auditors Report if PVT LTD


11. Share Holding Pattern on company letter head

12. Annual return with ROC copy

13. Photographs

14. Processing fee cheque

Who can go for project finance / construction finance?
Builders or developers with minimum 3 projects/1lac sqft experience can avail this facility
Who are eligible for Project Finance/Consturction finance?

The general factors taken into account while determining the eligibility of project finance are listed below:

1. The promoters should have proven track record and have successfully completed minimum 3 projects

2.The developer or the builder should have the land ownership in their name or firms name.

Which projects can be funded?

Vacant Land : Land ownership in firms or promoters name.
: Development agreement with the land owners

SRA Project :If land is a private land of the developer then salable portions of the construction cost Can be financed.(COMMENCENT CERTIFICATE OF THE SALEABLE PORTION MUST)

Redevlopment project : In redevelopment project only saleable portion of the construction cost can be financed if commencement certificate of the saleable area is available

What are the process for availing Project Finance?

• Project Report on CFPL format (Download it from our website)

• Project Evaluation

• Profile of the builder/developer

• Documentation

• Property Valuation

• Personal discussion

• Sanctioning of the Loan

• Disbursement (slab wise)

The Process may vary from bank to bank in which they will do your verification of documents, residence, office, and a cibil check

What are the loan tenure options for Project finance?

There are no fixed tenure it Depends upon the completion of the project

What are the documents required for applying for project finance?

Financial Documents

1. Application form with photograph

2. Identity and Address Proof

3. Proof of business existence

4. Last 3 years ITR

5. Last 3 years P&L and Balance Sheet

6. Bank Statements (Last 12months)

7. Processing fee cheque

Property Documents

1 Relevant Property Papers

2. Profile of the builder

3. Project Report

4. Valuation report

Please refer the complete list of documents on our website in the document section of Construction Finance

How much loan can I get?
It depends upon the project and varies from bank to bank
How would the value of my property be determined?

The value of the property would be determined through a valuation conducted by the bank

Does the property have to be insured?

Yes , property has to be insured varies from bank to bank

How much time does it take for the disbursement of the loan?

It takes 45 working days from the day of completion of documents and it may vary from bank to bank

How can i repay my loan?

The loan will be repaid through the capitalization/prepayment stipulated. It also be repaid through the principal component of EMI whenever EMI starts (after the moratorium period)

Can i prepay my loan ?

The loan can be prepaid although there are prepayment penalties stipulated. It varies from bank to bank.

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