Spec builds, multi-dwelling sites, subdivisions and larger projects. Bank and non-bank lenders, structured so funds are drawn against your program, not against a retail credit policy that was never written for development.
1-2 Dwellings
Building to sell rather than to a signed buyer. Because there’s no presale underpinning the exit, lenders look hard at the location, your track record and the margin in the feasibility. Often the fastest facility to put in place if the numbers are clean.
3+ dwellings
Duplexes, townhouse rows and small unit sites. Once you’re past a handful of dwellings, most banks start asking about presales and debt cover, while non-bank lenders will often proceed without them at a higher cost. Choosing between those two paths is the real decision.
Land
Splitting a parcel and funding the civil works through to titled lots. Lending is assessed on the value of the lots on completion against the cost to get them there, with drawdowns tied to civil milestones rather than building stages.
Speed over cost
Site acquisition before your main facility is in place, settling to a deadline, or bridging a gap while stock sells. Private lenders move in days rather than weeks, priced accordingly. Useful when timing is the constraint — provided the exit is genuinely defined.
Two kinds of lender fund development projects. Banks are the cheapest money you can get, but they’re slower and ask for more before they’ll commit. Non-bank lenders with private funds and specialist lenders which cost more, but they move faster and ask for less. Most projects can be funded either way. The real question is which one hurts you more: the cost, or the wait.
| Banks | Non-bank lenders | |
|---|---|---|
| What it costs | The cheapest money available | More — you're paying for speed and flexibility |
| Do you need buyers lined up first? | Often yes, once you're past a few dwellings | Usually no |
| How long until you're funded | Weeks, through a full credit assessment | Days to a couple of weeks |
| How much they'll lend | Less. They're more cautious | More, measured against what the project costs to build |
| Go with this when | You have time, buyers, and a track record behind you | The site won't wait, or presales aren't realistic for this stock |
Your residential borrowing capacity barely enters into it. What a credit team is testing is whether the project can carry the debt and repay it on exit which comes down to these.
What the finished project is expected to sell for, net of GST, supported by an independent valuation. Nearly every other number is expressed against it.
Debt commonly sized well below GRV
Land, construction, professional fees, council contributions, interest, and contingency. A quantity surveyor usually verifies the build cost before drawdowns begin.
What’s left after every cost is met. Too thin and there’s no buffer for a variation or a soft market, and credit will decline it regardless of how good the site is.
Site, program, costings, exit and your track record. We’ll tell you quickly whether it’s fundable and roughly where.
We present it to the lenders whose appetite actually matches the project, and come back with indicative terms to compare side by side.
We manage the independent valuation and quantity surveyor reports through to formal approval and settlement.
We handle progress claims against the program, and set up the takeout, like sale or refinance to term debt before you need it.
Reviewed by Jackie Wang, Partner at Formation Finance
Jackie Wang holds a Master of Professional Accounting from the Royal Melbourne Institute of Technology (RMIT), and has over 10 years of experience in finance and lending, structuring tailored funding solutions for Australian developers and investors.
Last update: 22/07/2026
It’s sized two ways at once, against the finished value of the project and against what it costs to build. Whichever produces the lower number is the constraint. Banks are generally more conservative on both measures; non-bank lenders will typically go higher against cost in exchange for a higher rate. Your equity, or the equity already in the land, covers the balance.
Usually not out of pocket. On most development facilities the interest is capitalised — added to the loan and paid out of the project on exit — with an interest allowance built into the total cost from the start. It’s important that allowance is realistic, because an overrun eats it and then eats your margin.
Often yes, through a short-term or private facility, then refinanced into the construction facility once approvals are in place. This is common where a site has to be secured to a settlement date. The key question is the exit: a lender needs to see a credible path to either the development facility or a sale, not just an intention.
In our experience: a feasibility with no contingency, an exit that assumes an optimistic sale price, costings that predate the current build market, or a program that doesn’t allow for realistic delays. Most of these are fixable before an application goes anywhere which is why we’d rather look at the numbers early than submit and get a decline on file.
