Glossary
Cost to complete
Cost to complete is the amount still needed to finish a construction project at a given point, including remaining building costs, consultants, contingency and finance costs. Lenders track it against the undrawn loan to make sure the project stays fully funded.
An example
Halfway through a build, the QS reports that remaining costs have risen above the undrawn facility. The lender requires the developer to contribute more equity before further payments are made.
Why it matters
If the cost to complete exceeds the funds available, the lender may stop payments until the gap is filled, which can halt construction. A realistic contingency reduces this risk.
Points to check
Ask how often the quantity surveyor will report the cost to complete and what happens if it exceeds the undrawn facility. Usually the borrower must fund the shortfall before further drawdowns, so know where that money would come from. Check whether variations you have agreed with the builder are included in the figure. Keep your own running total from contracts and claims, and compare it with the surveyor's reports so surprises are caught early.
Read about cost overrun and gst funding facilities