Joy A. Barrist, Benesch Friedlander Coplan & Aronoff LLP
Editor’s note: Benesch, Friedlander, Coplan, & Aronoff says this article contains a small sampling of terms contained in almost all commercial construction loan documents, which require careful review, consideration and negotiation. If such terms are not properly drafted to fit a particular project, the result could be additional, unexpected costs to a borrower, something we all want to avoid. Being represented by seasoned construction finance counsel could, over the life of a construction project, end up saving a borrower exponentially more than the up-front cost. Wind industry construction companies may find it useful.
|I have heard the following statement many, many times over the course of my career: “Do I really need to hire an attorney to close a simple commercial construction loan?” Needless to say, I cringe each and every time. While everyone loves to keep loan closing costs to a minimum, there are hidden costs of not being represented by counsel that could far outweigh this perceived up-front savings. Below are five examples of standard commercial loan documentation concepts that warrant careful review by borrowers and their counsel before any loan documents are executed.