Stuck with unsold units draining profits? At Formation Finance, we specialise in residual stock loans – tailored finance solutions that allow developers to release equity from completed but unsold residential or commercial stock. Whether you’re looking to refinance construction debt, fund your next project, or buy time for sales, residual stock lending gives you the breathing space and flexibility you need.
A residual stock loan is a short-term finance facility secured against newly completed but unsold stock—typically apartments, townhouses, titled land lots or commercial units.
Rather than selling quickly below market value or waiting for all stock to move, developers can use residual stock loans to:
Residual stock finance is a strategic solution for managing cash flow while maintaining control of your asset disposal strategy.
✅ Improved Cash Flow
Free up capital tied in unsold stock to fund acquisitions or cover costs.
✅ No Need to Sell Immediately
Hold and sell stock on your timeline, not the bank’s.
✅ Flexible Terms
Loan terms from 6 to 24 months with interest capitalised.
✅ Higher LVRs
Borrow up to 75% of the value of your completed stock.
✅ Fast Turnaround
Access funding quickly. Approvals within 48 hours.
Case Study: A Sydney developer refinanced $5.2M in unsold townhouses via residual stock finance, slashed interest costs by 20%, and sold units 9 months later at a 15% premium.
Developers with completed residential or commercial stock
Builders with residual inventory to refinance
Developers transitioning between projects
Groups looking for fast and flexible capital solutions
If you’re holding stock post-construction and need a liquidity bridge, residual stock lending can be a powerful financial tool.
We work quickly and efficiently so you can focus on your next move:
1) Initial Approval (48 hrs)
We assess your completed project, location, stock type, and sales strategy.
2) Valuation & Structuring (within days)
We obtain an updated valuation and structure a loan tailored to your needs.
3) Final Approval & Settlement (within days)
→ Funds clear construction debt; you control sales timelines.
⚠️ Real-World Fix: A builder in Brisbane completed a 10-townhouse project but faced slow sales. We sourced a $2.5M facility with interest capitalised over 12 months, giving them the flexibility to sell at market value without pressure to discount.
| Development Site Loans | Construction Loans | Residual Stock/ Bridging Loans | Mezzanine Loans | |
|---|---|---|---|---|
| LVR (up to) | 70% | 70% | 70% | 75% |
| Loan Term | 3-24 months | 12-24 months | 3-24 months | 3-24 months |
| Rates (from) | 8.49% p.a. | 9.99% p.a. | 8.49% p.a. | 15.00% p.a. |
Most property development projects entail a substantial amount of construction debt funding that must be repaid upon completion. Specifically, for residential projects like townhouses and land subdivisions, the objective is usually to sell enough units to cover the construction debt. However, if the developer falls short of achieving sufficient sales, they may need to refinance the remaining balance. This is where a residual stock loan can prove beneficial. Read more.
A developer should consider residual stock loans when they wish to refinance against unsold completed stock (e.g. aprtments) to repay existing construction loan or release equity. You should consider applying when you are close to getting Occupancy Permit (Certificate).
Both residential and commercial projects of any size are eligible for residual stock loan funding.
