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Credit
What is Credit?
Credit in the construction industry refers to the financial trust extended to a company or contractor, enabling them to procure goods or services with the understanding that they will pay for these in the future, typically with added interest. Credit is instrumental in this industry, as it often involves huge capital investments upfront, long before the revenue from the completed project is realized. A company's creditworthiness or ability to repay, is a determining factor in receiving credit. Construction companies frequently use lines of credit for purchasing equipment, hiring labor, buying supplies, and meeting emergency expenses. Moreover, credit facilitates smooth cash flow, allowing construction projects to progress without financial hiccups.
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Other construction terms
What is Net D?
Net D, in the context of the construction industry, refers to the "net deliverable" square footage or area of a constructed property. It applies to the actual usable space that remains after the subtraction of communal areas such as shared hallways, staircases, and residential utilities from the gross square footage. In commercial real estate, it typically excludes areas reserved for mechanical systems, structural elements, elevator shafts, and similar components. This figure is critical as it impacts the leasing or selling value of a property and also informs space allocation, cost assessment, and planning considerations during a construction project. Therefore, understanding Net D is key to optimizing building layouts and the planning of space allocations within any construction project.
What is Lump Sum Billing?
Lump Sum Billing in the construction industry refers to a fixed contract price for the completion of all work required for a specific project. This means that the contractor agrees to complete the whole project at a specific set cost irrespective of the amount of resources and time spent on the project. The contractor bears all the risk and is responsible for any cost overruns. Lump sum billing is commonly used in construction due to its simplicity, as the entire project is billed one time for one set amount.
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What is an Architect?
An architect is a professional who works within the construction industry and is responsible for designing and planning buildings and oversee their construction. They utilize their specialized skills in art, science, technology, and humanities to design safe and functional buildings, from residential homes to large commercial properties. Besides the aesthetic aspect, their work also involves understanding structural integrity, safety regulations, and building codes. The role extends beyond design, it includes meetings with clients, contractors, engineers, and other professionals. Their intricate hand in shaping environments makes them a vital cog in the construction industry.
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