How development finance is actually assessed
Development lenders look at the project before they look at you. Here is what they test, and where projects usually come unstuck.
ReadDevelopment finance
Funding that keeps
the job moving.
From buying the site to selling the last dwelling.
What we cover
Projects
we fund.
- Site acquisition and land banking
- Funding to secure a site, with or without planning approval, with the construction stage planned from the start so the first loan doesn't block the second.
- Construction facilities
- Multi-unit residential builds such as townhouses, duplexes and apartments, funded in stages against your builder's programme.
- Commercial and mixed-use builds
- Office, retail, industrial and mixed-use projects, assessed on cost, presales or pre-leasing, and end value.
- Subdivision and land development
- Civil works and titling for land subdivisions, through to the sale of the lots.
- Mezzanine and stretch senior debt
- Additional funding that sits behind or extends the senior loan, reducing the equity you need to put in, at a higher cost.
- Residual stock and take-out
- Refinancing completed but unsold dwellings so the construction loan can be repaid while you finish selling.
Our approach
How we
go about it.
The numbers come first
No lender can rescue a feasibility that doesn't stack up. We'd rather test yours honestly than take it to market and find out there.
Money arrives when it's needed
Drawdowns are set against your builder's schedule, so funding turns up when the work does.
We keep it from stalling
The quantity surveyor, the valuer and the lender's conditions all get coordinated, so nothing sits waiting between stages.
Typical terms
What it usually
looks like.
General market practice, not an offer or a guarantee. What's available depends on the security, the structure and your position, and is subject to assessment.
- Maximum lending
- Around 70% of total development cost, also capped as a share of the completed value
- Loan term
- Matched to the build programme, commonly 12 to 36 months
- Interest
- Usually capitalised, so it's added to the loan during construction rather than paid monthly
- Drawdowns
- Progress payments released against a quantity surveyor's sign-off, not the builder's invoice
- Presales
- Required by some lenders; others need few or none, usually at a higher cost
Getting ready
What you'll
likely need.
- A feasibility study and development budget
- Planning approval and the construction programme
- Builder details and the building contract
- Presale position, where the structure requires it
- A quantity surveyor report and panel valuation
- Developer and builder track record
General market practice, not a Guardian requirement or guarantee. What any particular lender asks for varies by product, security and borrower.
Common questions
Straight answers.
It depends who's funding it and what you're building. Some structures work with few presales or none at all, usually at a higher cost, because the lender is wearing more of the sales risk instead of you.
Presales aren't the only thing that moves the answer either. How much you're putting in, who's building it and what you've completed before all count.
A quantity surveyor checks your development budget independently before funding starts, then signs off progress as the job goes on. Lenders release each drawdown against that sign-off rather than the builder's invoice — so in practice, the QS is what keeps the money flowing.
Usually as two facilities, sometimes from two different lenders. The trap is sorting out the site funding on its own and then finding nobody will fund the build on top of it. We plan both together so the first stage doesn't compromise the second.
A residual stock facility refinances the finished but unsold dwellings, which takes the pressure off a construction loan coming up to its term. Much easier to arrange before practical completion than after.
Enquire
Send through
the project.
The site, where planning is up to, and your timeline. That's enough to get started.
Sent
Your enquiry is with us.
Expect a reply within one business day. If it's time-critical, call (03) 9988 1452.