Sources and Uses: Construction Budget Management

Arguably the most important element of managing a construction loan budget is properly allocating the source of funds (“sources”) for a project and tracking the uses of these funds (“uses”). Proper management of this relationship ensures compliance and protects the lending institution of unnecessary exposure. Let’s begin with a brief description and examples of “sources” and “uses”.What are “Sources”?“Sources” are the accounts which fund the construction improvements. In a simple deal it may