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Builder
Due Diligence
About to sign a builder, or fund a project that relies on one?
An independent read on the builder, not the site. Before a developer signs a building contract or a financier commits at the early deal round, the question is whether that entity can carry this job.
The review runs in two parts. The qualitative side covers company, director and shareholder searches, prior insolvency, the current pipeline and the track record on work of the same type and scale, industry reference checks and searches for current litigation and past judgements, with a meeting with the builder's directors alongside the searches. The financial side runs in parallel with a specialist accounting firm: audited and year-to-date accounts, aged debtors and creditors, work in progress, forecasts, PPSR, ATO position and payment times, and written confirmations from the directors on matters such as covenant breaches, bonds called, payment plans and legal actions. It comes back as one report with a weighted rating and a recommendation, and a meeting to talk it through. Where the contract method is also in question, the proposed structure is reviewed against the alternatives from the financier's point of view.
When you need it
Before a developer engages a builder, or at the early deal round when a financier needs to know the builder can carry the project. Reports issue about fifteen business days after the builder's information arrives, or four to five weeks including collection.
Questions
What does builder due diligence check?
Whether the builder can carry this project. The entity, its directors and shareholders, any insolvency, litigation or judgements, the current pipeline and the record on work of the same type and scale, industry references and a meeting with the directors. In parallel, with a specialist accounting firm: the accounts, debtors and creditors, work in progress, forecasts, PPSR and ATO position.
Who is it for?
Developers choosing a builder before they sign a building contract, and financiers who need to know at the early deal round that the builder can deliver the project they are funding.
How long does it take?
The report issues about fifteen business days after the builder's information arrives, or four to five weeks including collecting it.
What do I get at the end?
One report with a weighted rating and a recommendation, and a meeting to talk it through. Where the contract method is also in question, the proposed structure can be reviewed against the alternatives.
Do you review the site as well?
Not in this engagement: builder due diligence reviews the builder. For a site, see Site Identification & Acquisition, or start with a Site Appraisal.
Talk itthrough
Send the detail through and I will come back the same day.
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