Overview
Placeholder introduction. An interest reserve is a portion of loan proceeds held back by the lender to pay interest during a project's pre-revenue period. The borrower generally pays interest on the reserved funds even though those funds were never available for project use.
Where problems arise
Placeholder section. This guide will explain how reserve depletion, project delay, and draw disputes can interact, and what documentation a borrower should keep.
CPCA is a nonprofit oversight organization and not a law firm. This guide is general information, not legal or financial advice. Consult a licensed attorney in your state.