How Banks Manage Fixed Price Build Contracts
Banks prefer fixed price build contracts because they provide cost certainty, but funds are not released all at once.
Instead, payments are made in stages such as deposit, base, frame, lock-up, and completion. At each stage, the bank confirms progress, often through a valuation, before releasing the next portion of funds.
This process ensures the build is progressing as planned and reduces risk for both the lender and the borrower.
