Typically used in Development Finance, and expressed as percentage or a fixed monetary figure. It is an allowance built in to the Build Cost to allow for Cost Overruns. The industry standard is to build 5% into the Build Budget. Lenders will normally accept 5%, but some lenders will insist on more, perhaps up to 10%. This is covered within the Build Loan and will be 100% covered, before the residual debt is applied to the Land Loan.
