Before a developer approaches any lender, they need to answer one question. Are they after ROI or leverage? Most developers have never consciously asked themselves this. They go straight to the lender conversation without settling the strategy question first. That single gap shapes every finance decision that follows, and it costs them more than they realise.
ROI or leverage. You cannot optimise for both at the same time.
If you have equity and strong servicing capacity, a bank will give you the cheapest money and the cleanest terms. If you need to stretch beyond what a bank will do, you need a different type of lender entirely. Understanding which situation you are in before you approach anyone is not a nice-to-have. It is the foundation of your entire capital strategy.
What the Question Actually Means
A developer optimising for ROI has strong equity, good serviceability, and the financial position to access bank funding. Australian banks, constrained by APRA’s prudential guidelines, typically lend to 65% of gross realisable value on a development project. Sometimes 70% for a well-credentialled sponsor with pre-sales. The cost of that money is lower. The terms are cleaner. The relationship with the bank is a long-term asset.
A developer optimising for leverage needs to go further than a bank can take them. They may have less equity in the deal. They may be working with a tighter feasibility margin. They may be growing their portfolio and need to preserve capital across multiple projects simultaneously. For them, the bank’s 65% LVR ceiling is a hard constraint, not a guideline.
This is where institutional lenders, foreign banks, and specialist non-bank lenders come in. These entities operate outside APRA’s prudential framework and can stretch to 75%, 80%, or in some cases further, depending on the deal, the sponsor’s track record, and the asset quality. The cost of that money is higher. But access to it can be the difference between a project proceeding and a project stalling.
Strong balance sheet, clean ATO position, consistent cashflow across all entities, and sufficient working capital to absorb the project timeline without strain.
Tighter equity position or thinner working capital reserves. The group can service the project but needs to stretch the debt further to make the feasibility work.
Major banks and second-tier banks operating under APRA guidelines. Typically 65% to 70% LVR on GRV. Lowest cost of capital.
Non-bank lenders, institutional lenders, foreign banks. Can stretch to 75% to 80% LVR or beyond. Higher cost, more flexible.
Leverage. You are leaving capital in the deal that could be working in another project.
Margin. The higher cost of capital compresses your feasibility. The numbers still need to work at that cost.
Often not required. The bank facility covers the project adequately at the available equity level.
Can be a strategic tool to bridge the gap between the senior lender’s ceiling and total project cost, preserving equity for other uses.
APRA Restrictions and Why They Matter More Than Most Developers Realise
Australian banks operate under APRA’s prudential framework. For development finance, this creates hard ceilings on LVR that are not negotiable regardless of how strong the developer’s track record is or how compelling the project is.
The ceiling is typically 65% of GRV (gross realisable value) for residential development. Some banks will stretch to 70% for experienced sponsors with strong pre-sales coverage. Beyond that, the bank simply cannot go. This is not a credit decision. It is a regulatory one.
Many developers understand this in theory but underestimate its practical impact. They build a feasibility that works at 75% LVR, approach a bank, and then face a capital gap they had not properly planned for. The project is sound. The gap is a structural problem created by starting the conversation at the wrong place.
A developer approaches a major bank with a well-credentialled residential project. Strong site. Good location. DA approved. The bank likes the deal but can only go to 65% LVR. The developer needs 75% to make the feasibility work without injecting additional equity they have available for other projects.
The developer’s instinct is to find a bank that will stretch further. The right answer is to reframe the capital structure entirely. A senior bank facility at 65% LVR, combined with a second mortgage from a specialist lender behind the senior position, can take the total debt to a level that makes the feasibility work. The cost of the blended capital is higher than a single bank facility, but it is frequently lower than the all-in cost of a non-bank senior facility at 75% to 80% LVR.
Understanding this structure from the outset opens up a meaningfully wider range of options than approaching the problem as a simple search for a higher LVR.
The Role of Second Mortgages in Development Finance
A second mortgage sits behind the senior lender in priority. If the project does not proceed and the security is realised, the senior lender is repaid first. The second mortgagee takes their position from what remains. This subordinated risk position is why second mortgage capital is more expensive than senior debt.
But used strategically, a second mortgage is not just a gap-filler. It is a capital efficiency tool.
Consider a developer with a project requiring $20M in total debt. A senior bank facility at 65% LVR covers $13M. The developer has $4M of equity available and a feasibility that requires $3M more in debt than the bank will provide. A second mortgage of $3M, priced at a higher rate than the senior facility but structured with a short term tied to project milestones, bridges that gap. The developer proceeds. The bank facility remains clean. The blended cost of capital is manageable within the feasibility margins.
I am currently working on exactly this kind of structure for a client. A major residential development with a senior facility already in place and a second mortgage being arranged with a specialist lender to bridge the gap between what the senior bank will do and what the feasibility requires. The second mortgage is registered, the terms are clearly documented, and the exit is tied to the project’s presales and settlement timeline. Clean, deliberate, and structured from a credit-first perspective.
The developers who use second mortgages well treat them as a planned component of the capital stack from day one. Not as a rescue when the senior facility falls short. Planning for it early means better terms, more lender options, and a capital structure that reflects the actual shape of the project.
How the Best Developers Approach the Capital Conversation
After working on development finance deals across a range of project types and sizes, the pattern is clear. The developers who access the best capital, on the best terms, with the most reliable execution, are not necessarily the ones with the biggest projects or the longest track records. They are the ones who approach the capital conversation with clarity, honesty, and a clear understanding of how lenders assess risk.
They come to the table with a complete information package. They know their feasibility inside out and can defend every assumption. They are transparent about where the gaps are. They have a clear view of what they need and why, and they understand that a lender who says yes to a well-structured deal is worth far more than ten lenders who might say yes to an inflated one.
Development finance markets are smaller and more relationship-driven than most developers expect. Lenders talk. Brokers talk. A reputation built over years can be damaged quickly by a single approach that is inconsistent, aggressive, or disconnected from the actual risk profile of the project.
Approaching multiple lenders simultaneously without a broker coordinating the process creates competing enquiries and signals to each lender that others may have already declined. Providing feasibility figures that cannot be defended under scrutiny wastes everyone’s time and positions the developer as someone who does not understand their own project. Pushing for terms that bear no relationship to the risk in the deal closes doors with the lenders who matter most.
The lenders who approach deals from a credit-first perspective, who speak directly with decision-makers, and who stand behind the terms they issue, are selective about who they work with. They are also the lenders with the best execution, the most reliable follow-through, and the deepest capacity when a project hits an unexpected challenge. Access to those relationships is worth protecting.
The developers who build strong capital networks over time do so by being the client that lenders want to back. That reputation compounds. So does the absence of it.
What Lenders Do Not Tell You They Are Doing
Lenders are skilled at making developers feel chosen. The compliments come early. Your project is exceptional. Your track record is impressive. We would love to be part of this. It feels like partnership. It is designed to.
What is actually happening is risk mitigation. By getting close to the client, by creating a feeling of grandeur and mutual investment, the lender is learning. They are listening for weaknesses. Watching for signs of stress in the group. Looking for the moment where the feasibility assumptions start to slip, where a presale falls over, where a construction cost blows out. They are building a picture of where the exits are if they need them.
The compliments are a lever. The relationship is a lever. The sense that the lender is in your corner is a lever. And they are pulled quietly, without announcement, every day in this industry. Most developers never see it. They are too close to the deal, too invested in the relationship, too relieved that someone said yes.
I see it. I have watched it happen enough times to recognise it early. And when I am involved in a deal, lenders cannot operate this way because they know I am watching. My job is not just to get the finance. It is to make sure my client is never in a position where a lender is gathering intelligence on them while pretending to back them.
A developer should never have to second-guess the intentions of their lending partner. That is exactly what a specialist broker is for. Not to fill out forms. To be the person who is unambiguously, completely, and only on the developer’s side of the table.
What a Credit-First Approach Actually Looks Like
When I take a development finance deal to market, I start with the credit, not the rate. That means understanding the project thoroughly before a lender sees it. The feasibility. The site. The sponsor’s track record. The capital structure. The exit strategy. The risks and how they are mitigated.
It means approaching lenders who are appropriate for the deal, not every lender in the market. A $5M second mortgage on a residential development site requires a different lender conversation to an $85M construction facility for a large-scale staged project. The lender pool is different. The credit criteria are different. The relationship that gets the deal done is different.
It means being willing to tell a client when the structure they are proposing will not work, and presenting an alternative that will. That conversation is not always comfortable. It is always more useful than taking a deal to market that is not ready and damaging the client’s lender relationships in the process.
And it means speaking directly with decision-makers, not account managers whose role is to collect information and pass it up the chain. Lenders who operate this way close faster, price more accurately, and execute more reliably. That is the relationship I build and protect on behalf of my clients.
Whether the deal is $500,000 or over $100 million, the approach is the same. Credit first. Relationship first. Rate last.
The Different Types of Development Finance and Where They Sit in the Capital Stack
Development finance is not one product. It is a layered capital structure where different lenders occupy different positions, carry different risk, and price accordingly. Understanding where each type of finance sits in that structure changes how you approach your entire funding strategy.
Senior Debt
The largest component of the capital stack. Senior debt sits in first mortgage position, meaning this lender is repaid first in any enforcement scenario. Because of this priority position, senior debt is the cheapest form of development capital available.
For residential development, Australian banks under APRA guidelines typically provide senior debt to 65% of GRV. Non-bank lenders and institutional lenders can go to 70% to 80% depending on the deal quality, sponsor track record, and pre-sales position. The construction facility is drawn in stages against certified progress claims, not advanced as a lump sum.
Mezzanine Finance
Mezzanine finance sits between senior debt and equity in the capital stack. It is typically provided as a second mortgage or through a subordinated loan structure. The mezzanine lender takes their repayment after the senior lender but before the equity investor, which makes their position riskier than senior debt and priced accordingly.
Mezzanine finance is used to bridge the gap between the senior lender’s ceiling and the total project cost, reducing the equity required from the developer. A project requiring $20M in total debt with a senior facility capped at $13M might use $4M of mezzanine to reduce the equity contribution from $7M to $3M. The blended cost of the senior plus mezzanine stack is higher than senior alone but lower than the all-in cost of a non-bank senior facility stretched to the same level.
Preferred Equity
Preferred equity investors sit above ordinary equity in the distribution waterfall but below all debt. They receive a preferred return before the developer takes profit. Preferred equity is not debt. There are no registered mortgages and no default triggers tied to construction milestones. It is a more flexible form of capital but typically more expensive than mezzanine debt, and it involves an equity partner in the project rather than a lender.
For developers who need to stretch the capital structure further than debt alone can take them, or who are working on projects where the security position makes traditional mezzanine difficult, preferred equity can be a viable alternative worth exploring.
Equity
The developer’s own capital. Equity sits at the bottom of the capital stack. In any enforcement scenario, equity is the last position to be repaid, which is why the developer’s return, when the project succeeds, is highest. Equity is also the most expensive capital in the stack in terms of opportunity cost, because it is the developer’s own money that could be working elsewhere.
The ROI versus leverage question is fundamentally a question about how much of your own equity you want in the deal and what you are prepared to pay to reduce it.
Largest component. Lowest cost. First repaid. Bank or non-bank. 65% to 80% LVR depending on lender type.
Lowest cost in the stack. Rate depends on lender type, LVR, deal quality, and market conditions. Indicative pricing should be confirmed with a specialist broker for your specific deal.
Bridges the gap between senior debt ceiling and total project cost. Registered behind the senior lender.
Higher than senior debt, reflecting the subordinated risk position. Often structured with fees and profit participation in addition to the interest component.
No registered mortgage. Preferred return before developer profit. More flexible but more expensive than mezzanine.
The most expensive form of capital in the stack. Typically structured as a preferred return plus profit participation. No registered security but equity partner involvement in the project.
Developer’s own capital. Last repaid in any enforcement. Highest risk, highest return when the project succeeds.
Highest opportunity cost. Every dollar of equity in this project is a dollar not working in the next one.
How a Specialist Development Finance Broker Runs Things Differently
A generalist broker who occasionally does development deals and a specialist development finance broker are not the same thing. The difference matters, and it shows up most clearly at the moments when a deal gets complicated.
A specialist understands the capital stack before they approach any lender. They know which lenders are active in the market right now, what their current appetite is, what their LVR and pre-sales requirements look like, and which deals they have closed recently. That is not information that lives on a rate sheet. It comes from sustained relationships and active deal flow.
A specialist reads a feasibility and finds the structural issues before a lender does. Unrealistic construction cost assumptions. A GRV that does not reflect current comparable sales. A contingency that is too thin for the project complexity. These are the things that get picked apart in credit. Identifying them first and either addressing them or presenting them with appropriate context is the difference between a credit submission that gets a yes and one that gets a conditional maybe that never converts.
A specialist knows the credit process at each lender they work with. Not the front-of-house process. The actual credit process. Who makes the decision. What they weight most heavily. What will slow a deal down and what will speed it up. That knowledge is built over time through live deal experience and it is not something you can replicate from a lender’s website.
And a specialist has the relationships to pick up the phone and speak directly with a decision-maker when a deal needs it. Not an account manager. Not a BDM whose role is to collect information. The person who will actually say yes or no and who has the authority to structure a deal that works for both sides.
How I Do It
I start every development finance conversation the same way. I want to understand the deal before I think about the lender.
What is the project? What is the sponsor’s track record? What does the feasibility actually say, not what the developer believes it says? What is the capital structure and where are the gaps? What is the exit and how certain is it?
And critically: what is the financial capacity of the group? Not just the project entity. The entire group. I want to see the consolidated balance sheet across every entity. I want to understand the working capital position and whether the group can sustain a project of this scale across an 18 to 36-month timeline without cash becoming a constraint mid-construction. I want to see the ATO position for every entity. I want to understand the existing debt obligations and what the group’s capacity looks like after servicing them.
This is not box-ticking. It is the most important part of the credit assessment. A project can look compelling on paper and still be the wrong deal if the group behind it does not have the financial capacity to see it through. Lenders know this. I assess it before a lender ever asks the question, because the answer shapes everything about how the deal is positioned and which lenders are appropriate.
Once I understand the deal clearly, I identify the appropriate lender pool. Not every lender in the market. The lenders whose current appetite aligns with the deal’s risk profile, size, location, and structure. I do not send a deal to ten lenders and see who responds. I target the right two or three and present the deal in a way that gives them what they need to make a credit decision confidently and quickly.
I present to decision-makers, not gatekeepers. I write credit papers that tell the story of the deal clearly, anticipate the questions that will be asked, and address the risks proactively rather than leaving them for the lender to discover. I stay in the conversation through credit, through conditions, through settlement. A deal is not done until the money moves.
I am also willing to tell a client when their deal is not ready and what needs to change before it is. That conversation is not always welcome. It is always more useful than taking a premature deal to market, damaging the sponsor’s credibility with lenders, and having to rebuild that relationship later from a worse position.
My clients range from developers working on their first project to seasoned operators managing multi-project pipelines worth hundreds of millions of dollars. The size of the deal does not change the approach. Credit first. Relationship first. Rate last. Every time.
Planning the Capital Timeline: From Site Acquisition to Your Next Project
One of the most significant gaps I see in how developers approach finance is the deal-by-deal mindset. Each project is funded in isolation, the capital conversation happens when it is needed, and the pipeline beyond the current project is not considered until the current facility is almost repaid. For a developer managing a single project, this approach works. For a developer who wants to build a sustainable pipeline, it creates unnecessary pressure at exactly the wrong moments.
The developers who build strong portfolios plan their capital timeline the way they plan their construction programme. Every stage of the project has a funding implication, and every transition between projects requires capital that needs to be available before it is needed, not when it is needed.
The project capital timeline
Before a slab is poured, capital is already at work. Site acquisition requires either a deposit or an option payment, typically 10% of the purchase price or a negotiated option fee that secures the site while due diligence, DA lodgement, and pre-sales are underway. That capital is committed and illiquid. It needs to be planned for before the site is secured, not sourced in a hurry after contracts are exchanged.
During the DA and pre-sales period, the project is consuming working capital without drawing on the construction facility. Consultant fees, planning costs, marketing spend, sales agent commissions, and legal costs all accumulate before a single draw is made. Developers who have not planned for this phase often find themselves drawing on personal funds or deferring costs that then compound later in the project.
The construction facility draws in stages against certified progress claims. Interest is typically capitalised into the facility during the build period rather than paid monthly. But the facility is not free capital. Every draw increases the senior debt balance and reduces the LVR headroom that might otherwise support additional borrowing if the project needs it.
Practical completion triggers the settlement period. The main settlement run repays the construction facility and returns equity to the developer. But not every purchaser settles on time. Residual stock, the units or lots that do not settle in the main run, requires its own finance strategy.
Residual stock: getting the most from completed inventory
Residual stock is an area where preparation makes a material difference to the outcome. Once the construction facility is repaid, any unsettled stock needs either an extension of the existing facility at a higher cost, or a transition to a holding finance product secured against the completed units.
Completed stock is valued differently to off-the-plan product. A registered, completed apartment has a clear market value that a lender can independently assess. In some cases, a developer can access a higher effective LVR on completed residual stock than they could during construction, because the asset risk is lower. Planning for this transition in advance, with a lender who is willing to roll a portion of the facility into a holding line, avoids the common scenario where a developer is forced to discount residual stock to generate settlement cash rather than holding it at the right price.
Tax and GST obligations crystallise at settlement. Each settlement triggers a GST remittance obligation, whether the project is on the margin scheme or full GST. Those remittances need to be funded from settlement proceeds, not from the construction facility. Planning the timing of GST outflows against the settlement programme is a cash management exercise that needs to happen before the settlement run begins, not during it.
Rolling forward: funding the next project while the current one settles
The transition between projects is where pipeline management either works or breaks down. A developer who waits until the current project is fully settled before starting the capital conversation for the next one loses six to twelve months of momentum on their pipeline. By the time the equity from the current project is released and available, the next site may be gone or the market conditions may have shifted.
The developers who maintain strong pipelines are securing options on the next site while the current project is still in construction. They are lodging DAs while their current settlement period is underway. They are having the initial capital conversations for the next project while the current project still has six months to run. That overlap requires capital set aside specifically for the transition: option deposits, due diligence costs, holding costs, and the working capital to run two stages of a pipeline simultaneously.
Super obligations now apply on payday for any employees or eligible contractors, which means the working capital reserve for a development project needs to account for super being paid with each pay run, not deferred to a quarter end. Combined with GST remittances at settlement, ATO payment obligations are a more frequent and less deferrable cash requirement than they were three years ago.
A capital reserve that covers option deposits, acquisition deposits, working capital, GST and tax obligations at settlement, super on payroll, and a real buffer for the unexpected is not optional for a developer managing more than one project at a time. It is the infrastructure that allows the pipeline to keep moving without a forced sale, a distressed refinance, or a missed opportunity because capital was not available when the moment arrived.
How I manage the timeline across a pipeline
When I work with a developer across multiple projects, I am not just arranging the construction facility for the project in front of us. I am mapping the full capital timeline: the current project’s draw schedule and settlement programme, the transition period and residual stock strategy, and the capital requirements for the next site that is already being scoped.
That means the funding is planned ahead and layered strategically. The construction facility, the residual stock holding line, the option finance for the next acquisition, and the working capital reserve are all considered together, not in isolation. The transitions between projects are planned so there are no gaps in available capital, no forced decisions under time pressure, and no moment where the pipeline stalls because the finance conversation started too late.
It is the difference between managing one deal at a time and managing a development business. The finance structure that supports a development business looks very different to a single transaction. Getting that structure right, and keeping it current as the pipeline evolves, is work I do with my clients as an ongoing advisory relationship, not a one-off transaction.
Frequently Asked Questions
Australian banks operate under APRA’s prudential guidelines, which limit their development finance LVR to approximately 65% to 70% of GRV. Non-bank lenders, institutional lenders, and foreign banks are not subject to these restrictions and can lend at higher LVRs, typically at a higher cost.
The right choice depends on several factors specific to the sponsor. Their overall financial position and balance sheet strength. Their cashflow management capacity across the project timeline, which can span 18 to 36 months. Their equity position and how much of their own capital they are able or willing to commit to the deal. And their track record, because lenders at every level of the capital stack weight demonstrated delivery experience heavily.
A bank is generally the right starting point for a sponsor who is strong across all of these dimensions. A non-bank or institutional lender becomes the more appropriate conversation when the sponsor needs to stretch further than APRA constraints allow, or when the project’s risk profile sits outside what a bank will consider.
When the senior lender’s LVR ceiling creates a gap between the available debt and the project’s total funding requirement, and the developer either does not have sufficient equity to bridge that gap or prefers to preserve equity across multiple projects simultaneously.
At this point a developer has two main options to bridge the gap. The first is mezzanine finance, which sits behind the senior lender in a registered second mortgage position. It is more expensive than senior debt but cheaper than equity, and it preserves the developer’s own capital for other uses. The second is equity financing, where an equity partner contributes capital in exchange for a share of the project’s profit rather than a fixed interest return. Equity financing involves no registered security and no debt covenants, which gives the capital structure more flexibility, but it means sharing the upside with a partner rather than keeping it.
The choice between second mortgage, mezzanine, and equity financing depends on the feasibility margins available to absorb the cost, the developer’s appetite for sharing profit versus paying interest, and the overall shape of the capital stack. In some deals a combination of all three is the most efficient structure.
A well-structured second mortgage or mezzanine facility, planned from the outset rather than added as a rescue when the senior facility falls short, is one of the most effective tools available for stretching a development’s capital efficiency without giving up equity unnecessarily.
It means the deal gets assessed on its merits before anyone talks about price. And the person doing that assessment is the decision maker. Not a sales team. Not a BDM collecting information to pass up the chain. The actual person who will issue the terms and stand behind them.
Here is what the alternative looks like. A developer invests weeks, sometimes months, entertaining lenders. Showing their work. Sitting through meetings. Preparing information packages. Responding to requests. Getting dazzled by low rates and terms that sound almost too good. Then the emails stop. The calls go unanswered. The lender has moved on, the credit team said no, or the rate was never real to begin with. It was a sales pitch dressed as a term sheet.
And then there is the bait and switch. The developer who makes it through the process, pays their valuation fee, pays their application deposit, commits to the deal, and then receives a phone call at the eleventh hour. The terms have changed. The rate is higher. The LVR is lower. A new condition has appeared. By this point the developer is committed, the timeline is tight, and walking away carries its own cost. The lender knows this. Some of them count on it.
The time drain is real and it is significant. Every week spent chasing a lender who was never going to deliver on what they promised is a week not spent on site, on sales, on the next project. For a developer managing a complex pipeline, that cost compounds quickly.
A credit-first lender operates differently. Before they discuss rate, they want to see the financials of the group. The working capital capacity across the project timeline. The corporate structure. The track record. The resume of every principal. They are determining whether they want to be in this deal before they tell you what it costs.
When they issue terms, the decision has already been made at the level of the person sitting across from you. Not delegated, not conditional on a credit committee who has never seen the file. When they say yes, they mean it. The terms do not change at the eleventh hour because the work was done at the start, not the end.
That is the difference. One lender sells. The other lends.
Pre-sales are a risk mitigation tool for lenders. They demonstrate market demand for the product and provide a known exit for the construction loan. The level required varies significantly by lender and no two are the same.
From live deal experience in the current market, major banks are more flexible than their reputation suggests when the sponsor and project are strong. Some will fund with pre-sales coverage as low as 30 to 50% of the debt facility for the right deal. Others require higher coverage depending on the project type, location, and their current book position.
Non-bank lenders and private funders can go further still, sometimes offering to fund with minimal or no pre-sales at all, underwriting instead to GRV, feasibility margins, and the strength of the exit strategy.
But before any developer focuses on satisfying a lender’s pre-sales condition, they need to answer a more fundamental question for themselves. Can you actually sell this project? Pre-sales are not just a finance condition. They are market validation. If your product, your price point, and your location cannot attract buyers before a slab is poured, that is critical information. It tells you something about the project that no lender conversation will fix. A developer who cannot achieve pre-sales in the marketing phase has a product problem, a pricing problem, or a market timing problem. Finance is not the answer to any of those.
The developers who approach pre-sales intelligently treat them as an early signal of project viability, not just a box to tick for the bank. Strong pre-sales at healthy margins tell you the project is right. Weak pre-sales or heavy discounting to get contracts across the line tells you something else entirely, and it is worth listening to before you commit to 18 months of construction.
And here is the reality that experienced developers know and first-timers learn the hard way. The pre-sales requirement quoted at the start of a lender conversation is not always the one that applies at the end. I have seen developers go through an entire process with a lender who said no pre-sales were required, invest months of time and significant cost in the process, and then receive a phone call days before settlement with a new condition attached. Pre-sales now required. Terms changed. By that point the developer is committed, the timeline is critical, and walking away carries its own cost. That is the bait and switch in practice.
The right broker identifies the lenders whose stated pre-sales requirements are real and whose credit process reflects what was agreed at the start. That knowledge comes from live deal experience, not from reading a product guide.
The more complete your information package, the faster and more confidently a lender can make a decision. There are two categories of documentation every developer should have ready before any lender conversation begins.
Project documentation: A current feasibility study with realistic assumptions, not optimistic ones. Development approval or a clear and credible timeline to DA. A quantity surveyor report or detailed construction cost breakdown. A valuation or a well-supported basis for GRV. A clear capital structure showing equity contribution, senior debt sought, and any subordinate debt or mezzanine. And a documented exit strategy tied to specific milestones.
Sponsor and group documentation: A corporate structure chart showing every entity in the group, how they relate to each other, and who the ultimate beneficial owners are. Financial statements for every entity in the group, not just the project SPV. ATO position for each entity, with any payment arrangements documented and current. A consolidated assets and liabilities register across the group. A commitment schedule showing what the group earns, what it owes, and what the monthly surplus looks like after all existing commitments. And a track record document covering completed projects with delivery dates, project values, and outcomes.
The corporate and financial documentation is where most developers fall short. A lender assessing a large development deal is not just assessing the project. They are assessing the group behind it. If the financial picture of the group is unclear, incomplete, or inconsistent across entities, credit takes longer, conditions multiply, and the deal gets harder. Getting this documentation right before you approach anyone is one of the most valuable things a broker can help you with.
Working on a development deal and not sure where to start?
I work with developers from $500,000 to over $100 million. The conversation starts with the credit, not the rate. Let’s talk.
Book a Free Strategy Call Development Finance ServicesThe information in this article draws on publicly available regulatory guidance, industry data, and established practice in Australian development finance. Specific rate indications referenced in the capital stack overview are indicative of market positioning only and do not constitute a credit offer or quote. The cost of any development finance facility depends on individual deal characteristics and should be confirmed through a formal credit process. Readers seeking current pricing information should consult a specialist development finance broker.