Banks agree to lend to builders, but the conditions are tough

24.03.2011 10:23
Articles about real estate | Banks agree to lend to builders, but the conditions are tough Recently held its first meeting of the Finance Club UCA on the issues of attracting investments in the construction industry. It was attended by invited guests and 32 representatives of companies that are members of the UCA.

Executive Director, UBA Sergey Grabar, opening the meeting said that the established financial club UCA is a platform for professional communication and exchange of experience financial professionals.

Related article: Average cost of mortgages for the purchase of «primary organization» decreased slightly

Business meeting set the tone presentation by Professor of Finance of the International Institute of Business (IIB), Mikhail Sorokin, dedicated to the practical experience of business plan development and analysis of investment projects. In particular, he stressed that the principal in the business plan is not the form, and substantial content to the investor. Need a thorough knowledge of market demands and customers. Business plan and financial estimates should consider several alternatives to the project, evaluate and select the best alternative, and some scenarios of its development to address the risks.

On the possibilities of cooperation between banks with the construction industry have told the Vice Chairman of the Bank of Cyprus on the corporate business, Ivan Koryakin and chief of Piraeus Bank in Kiev, Alexei Novoselsky.

The main thesis of their performances - are banks willing to lend to projects for construction of real estate, but at a fairly stringent conditions.

Of course credit must be provided. As security is not acceptable
property rights to the facilities under construction are given credit. Enablement
may make other real estate, land or other property belonging to
borrower on the property. Credit may be granted at a rate of 60-70%
the appraised value of collateral. A loan of UAH may be granted
developer for a period not exceeding 5 years. Foreign currency long-term loans
provided at the rate of Libeuro +8%. The upper limit of the loan - $ 20 million

Suggestions for the credit must include a business plan describing
project and be sure to include a section with financial calculations, financial
model, the forecast cash flows recorded by the overhead and
financial costs. Should be assessed to the sensuality of the project price
conditions, delays in construction schedules and sales, as well as other risks

Project owner should make their own contribution to the financing of the project, preferably in
approximately 50% of the total amount of funding that the project requires. For
loan may require the owner and surety bail
Corporate / stock company formed for the project.
From the organizers of the first meeting of the Club made by the Director of Audit firm MTD Audit Victoria Biryuchenko, Deputy Director General SK "Indigo" Leniza Sermon. Among the participants of the meeting was conducted surveys on the organization of the Club's activities and topics of these meetings.

In particular, Victoria Biryuchenko told about the possibility of sharing experiences with the American association of financial managers of the construction industry (SRMA), which UCA contract for representation in Ukraine of Studies, is the intellectual property SRMA.

Victor Kovalenko
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