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Writing a solid investment/financing proposal

What will it take to get your commercial development dream up and running? 

November 18, 2020  5 minute read

When you think of a construction project, a variety of challenges spring to mind. One of the most valuable tools to get your commercial development dream up and running is drafting an effective investment/financing proposal. 

Building a solid proposal at the outset of your project will be money and time well spent in the long run. 

What is contained in a development project investing/financing proposal?

A well-written proposal will show potential financers, investors and other stakeholders the feasibility of your plans. It is also a great opportunity to take a deep dive into your project. The proposal should clearly outline who needs to do what and when, as well as the costs involved. This document will help you minimize costs by anticipating potential problems.

Your proposal should include:

  • the nature of the project
  • the make-up of your professional team, from your Business Relationship Manager to your Project Manager—everyone who has a part to play in your project
  • the identity of the end buyer and any special requirements
  • the kind of construction being proposed
  • the project’s tasks, phases and timelines
  • your experience with projects of this nature
  • the financing needs

What are some common gaps in proposals?

Make sure you review your document for some common issues. After all, you want to start your project on a solid foundation. Ask yourself:

  • Have I anticipated all the soft costs involved, like architectural and design fees, inspection fees and construction equipment?
  • Have I included the cost of financing?
  • Have I allocated sufficient contingency funds to deal with the inevitable bumps along the way?
  • Are my timelines realistic? It doesn’t pay to be overly optimistic about due dates.
  • Is my Sales Plan realistic?
  • Have I given enough consideration to Pre-Sales in my Sales Plan?
  • Do I have sufficient capital to carry the project’s financing costs if I encounter delays?
  • Is my take-out strategy well documented? A take-out strategy covers how the construction loan will be repaid, answering questions like:
    • Will I be relying on the sale of property to pay back the loan, or will I be converting it to a term mortgage? If my plan is to convert it to a term mortgage, have I factored in fluctuations in interest rates or income? What are my backup strategies if “Plan A” doesn’t materialize?
    • Does my plan consider municipal priorities? Common priorities include density, affordable housing initiatives, storm water management, and the Urban Forest Strategy, among others.   

By answering these questions, your proposal will help build your project’s viability and keep your stakeholders on the same page. To learn more about construction financing, connect with one of our experts.

Doug Forbes-King is a Senior Business Relationship Manager at Coastal Community, with over 30 years’ experience in the field. 


Other topics to explore:

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 Turn your business debt into an asset

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 The value of partnerships in growing your business

Doug Forbes-King

Doug Forbes-King
Senior Business Relationship Manager