How this lending option works
Property development finance is structured around the project feasibility, site, planning position, construction budget, valuation, sponsor experience, borrower equity and exit strategy. We compare suitable options across banks, non-banks and private lenders.
- Residential and mixed-use developments
- Bank, non-bank and private lender options
- Construction funding and residual-stock exits
Feasibility and lender assessment
A lender may examine the acquisition cost, development approval, plans, building contract, quantity-surveyor reports, projected end value, project costs, contingency, presales and the developer's experience. The required information and acceptable gearing vary by lender and project.
Construction drawdowns and cost control
Approved construction funds are generally released progressively against verified work and costs. The borrower must plan for equity contributions, interest, fees, variations, delays and overruns before relying on the facility to complete the project.
Exit strategy
The lender needs a credible repayment path, commonly through settlement of completed sales, refinance of retained properties or residual-stock finance. The exit should be tested against slower sales, lower valuations and higher holding costs.
Common questions
Are presales always required?
No. Requirements depend on the lender, project type, location, gearing, borrower strength and exit strategy. Some lenders rely more heavily on presales than others.
Can private lenders fund property development?
Potentially. Private funding can suit some timing, policy or complexity requirements, but pricing, fees, term, security and exit conditions must be assessed carefully.
Can I refinance completed but unsold properties?
Residual-stock finance may be available where completed properties, valuations, debt level, sales position and repayment strategy meet lender requirements.
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