We have access to a large number of financiers from which to source your property development finance.
This type of finance generally operates as an interest-only, draw-down facility to finance your development as required.
Often the interest on a development loan is capitalized during the development period. The entire loan inclusive of interest charged is repaid upon the sale of the development and or the refinance of any residual debt.
The borrowing capacity you can achieve for development finance will vary depending on the development lending criteria you are required to meet. This will vary from lender to lender and is also dependent on the proposal.
What is a Property Development Loan?
A property development loan is a loan designed to fund the construction of multiple properties on one title. Funding is available for developments of up to four units (townhouse, duplex, triplex) from residential property development loans. A commercial property development loan is required for larger projects.
Commercial Property Development Loan
For larger style projects a commercial property loan is required. This means higher interest rates, different fee structures, more information required by the banks.
Check out our Commercial Property Finance Page.
What are the funding stages of a property development loan?
The funds will be released at the end of each building stage. Funds are usually released at the following stages:
- The deposit
- Base stage
- Frame stage
- Lock-up stage
- Fixing stage
When the project is completed the remaining balance is released.
Property Development Loan Application
The bank will assess your development plans and your financial situation.
The lender will also need details of your financial situation, such as:
- Your overall financial position, including assets and liabilities
- The security you can provide for the loan (this could be cash or equity in an existing property)
- Your credit history
To prove the bank that your project is viable and profitable a property development business plan is required.
- The money you have to put towards the project
- Contingency funds to cover costs if unexpected expenses arise
- Your development experience on similar projects
- The builder’s experience and qualifications
- A description of the property, including where it is located and its zoning
- A design concept for the project
- A timeline for construction
- The total projected cost of the project
- Your plan for what to do with the properties upon completion, such as how you plan to sell the properties
Please contact us to discuss your property development finance requirements.
Call 02 9453 0300