What is direct pay?
Builders Capital will cut checks directly to your suppliers, vendors, and subcontractors. Direct pay simplifies your accounting processes, and can provide faster payment to your vendors. Checks are also automatically stamped with conditional lien release waivers; reducing the amount of paperwork you have to obtain.
How come some of my loans are not direct pay?
Builders Capital has different funds that loans are financed from. This is an approval condition that funds may prefer to use. If you wish to simplify the process and convert all of your loans to direct pay, please contact the draw department.
Where will my checks be mailed?
Checks will be mailed directly to you to distribute to your vendors.
How do I submit my direct pay draw request?
Once your loan closes, you will be provided with direct pay & draw management forms that show your available budget balance. These must be submitted via email in electronic format and accompanied by all invoices. Invoice totals must match amounts on draw management form.
What if I don’t have an invoice?
Unfortunately, we cannot process payment to a subcontractor or yourself unless an invoice is provided.
When do I need to submit my draw request?
Draw requests should be received by our draw department before the first day of the month. Draw requests received after the 5th are subject to an off-cycle draw fee.
Can I submit more than one draw per month?
Draws are done once per month. If you wish to submit an additional draw, an off-cycle draw fee may apply.
How long will it take to receive checks?
The draw process can take up to 10 business days for you to receive checks. Once your draw is received, an inspection and date down endorsement are ordered.
What is an inspection?
An inspection is ordered every time you request a draw. The inspection fee may be waived if you are requesting soft costs only. (Permits, Plans & Engineering, etc.)
Who completes the inspection? Can I schedule when the inspector comes out?
Inspections are scheduled based on geographic location and priority is given to borrowers who submit draws by the 1st of the month. Please do not submit a draw if you are not ready for the project to be inspected.
What is a date down endorsement?
A date down endorsement is ordered from the title company every time you request funds to ensure the property is free of liens, taxes, etc. These fees vary based on Title Company and will be applied to your loan balance. ($39-$109.50)
Do I need to pay inspection or date down fees up front?
Inspection, date down endorsement, and postage fees will be applied to your loan balance. These charges will be reflected on your monthly statement.
What if we have paid for items out of pocket and need to be reimbursed?
If you have paid invoices and need to be reimbursed, you will need to mark the invoice as PAID on your direct pay form. Proof of payment (cashed check, receipt, $0 balance statement, etc.) is still required to process payment.
What if I am a builder and my company has completed the work?
If you have completed some of the work for your loan, please include yourself as a subcontractor on your direct pay form and submit an invoice payable to your company.
Can you wire funds payable to my company?
All direct pay loans must be paid via check.
What if I receive a bid that requires pre-payment or a deposit?
Invoices are paid based on job progress complete. Typically, we will not prepay for work or deposits. On an exception basis, we will try to accommodate line items that require prepayment. A pre-payment fee may apply.
What happens to remaining funds in a line item once the work is completed?
If you have additional funds remaining in a line item that will no longer be needed, you are able to move these funds into your contingency line item. You are able to pull from contingency for the remainder of your loan to help with unexpected costs or overages. Please contact the draw department if you wish to move funds into contingency.
What if I have an invoice that is higher than the budgeted line item amount?
If you receive an invoice higher than the amount budgeted for that line item, you have two options:
Pay invoice difference directly out of pocket. For example: If you have an invoice due for
$17,890 and the budgeted line item only allows for $17,000 – you will be responsible for paying the $890.00.
If you have a contingency fund, you can allocate overages for this budget line item to help make up for the difference.
Can I revise my budget?
Your total construction budget cannot change. However, revisions to individual line items are may be considered and must be approved by Builders Capital. If you wish to submit a budget change, you will need to provide documentation of bids & estimates that will support moving funds to other line items. A budget revision fee of $1000 will apply.
Can I move funds between loans?
Funds cannot be moved between different loans. The construction budget amount was financed into your loan.