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Development Finance

Can You Get Finance Before Development Approval?

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Quick answer

Finance may still be possible before DA

60% 70%

Typical land bank style LVR range for suitable early stage sites

  • DA required for all lenders No
  • Common pre DA loan term 6 to 24 months
  • Best fit loan type Land bank or bridging
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Yes, in some cases you can obtain finance before development approval is in place. This is usually not a full construction facility. Instead, it is more commonly structured as land bank finance, short term bridging, or pre DA development funding to help secure and hold the site while approvals are pursued.

The further a project is from approval, the more lenders focus on site quality, zoning, exit strategy, borrower experience, and equity contribution. Projects with obvious planning upside and strong market demand are usually easier to fund than speculative sites with unclear development potential.

Banks are often cautious with pre approval risk, but non bank and private lenders may consider sites before DA where the location, planning pathway, and exit are clear. In many cases the early stage loan is later refinanced into a standard development or construction facility once approval has been obtained.

What types of pre approval projects can be funded?

Finance before development approval is generally used where the site already has a credible development story but the formal approval process is not complete.

In most cases, the lender is funding the acquisition or holding phase rather than committing immediately to full construction funding.

Typical scenarios include:

  • iconLand banking for a future townhouse or apartment site
  • iconSubdivision sites awaiting planning or civil approvals
  • iconShort term acquisition of a site with strong zoning upside
  • iconDevelopments where consultants are already engaged and DA is in progress
  • iconCommercial or mixed use sites being repositioned before formal approval
  • iconSites purchased quickly with a plan to refinance after approval

How pre DA finance usually works

Finance before development approval is usually staged differently from a standard construction loan.

The first facility may cover the land purchase or holding period, then a second facility may replace it once approvals and full feasibility are complete.

A common sequence may include:

  • 01 Acquire the site
  • →
  • 02 Lodge planning application
  • →
  • 03 Progress consultants and reports
  • →
  • 04 Obtain approval
  • →
  • 05 Rework feasibility and builder pricing
  • →
  • 06 Refinance to full development loan

This means the initial lender is often backing the approval pathway and exit strategy, not just the finished project.

Common loan structures before approval

Pre approval funding is usually structured in one of these ways:

Method 01

Land bank finance

Used to secure and hold a site before DA. The lender primarily assesses the land value, location, zoning potential, borrower strength and intended exit.

Method 02

Bridging or pre development funding

Used where a quick settlement or short approval window is required, often with a refinance or sale planned once approvals progress.

Typical early stage leverage 60 to 70% LVR
  • Lender funds are often lower than fully approved construction finance
  • Borrowers usually need stronger cash or equity support before DA

Where approval risk is still present, the maximum leverage is often more conservative than a fully documented post approval project. The exact limit depends on the site, exit, and risk appetite of the lender.

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What lenders want to see before DA

A lender funding a site before approval will usually want more than just a purchase contract.

They normally look for evidence that the site has a realistic path to approval and a credible exit.

A strong submission often includes:

  • iconZoning details and planning advice
  • iconSite due diligence and valuation support
  • iconConcept plans or consultant sketches
  • iconEstimated timelines for the approval process
  • iconBorrower equity position and liquidity
  • iconClear exit by refinance, approval uplift or sale
  • iconRelevant development or project management experience
  • iconSensitivity testing showing the project still works if timing blows out
6 - 24 m
Many pre DA loans are written as short term facilities. The idea is to secure the site, progress approvals, then refinance or exit once project risk has reduced and mainstream development finance becomes available.

Why approval status matters

Development approval changes how lenders view risk and usually improves finance terms.

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Before approval

Risk is higher because the final yield, timing and council outcome are not yet locked in.

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After approval

The project is easier to assess because planning risk has reduced and a full feasibility can be modelled more accurately.

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Common strategy

Borrow early, obtain DA, then move into a construction facility once the deal is stronger and lender options widen.

Common problems

Early stage funding is possible, but deals are often declined when approval risk is poorly explained or the exit is weak.

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Unclear planning pathway

If the zoning, overlay issues or council position are uncertain, lenders may see too much planning risk.

Possible solutions include:
  • icon Planning consultant advice
  • icon More detailed due diligence
  • icon A more conservative loan request
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No credible exit strategy

A lender needs to know exactly how the loan will be repaid if approval takes longer than expected.

Common exits include:
  • icon Refinance to a post DA facility
  • icon Sale of the site with approval upside
  • icon Injection of additional equity if required
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Insufficient equity

Because the project is not yet approved, lenders often want a stronger borrower contribution or additional support property.

This may be addressed by using:
  • icon Cash contribution
  • icon Equity in other property
  • icon A joint venture or private capital partner
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Trying to get full construction funding too early

Many borrowers ask for a full development facility before they have the approvals, fixed costs or documentation needed for a construction lender.

A better path may be:
  • icon Use short term site funding first
  • icon Progress the DA and reports
  • icon Refinance when the project is construction ready
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Steps To Get Finance Before Development Approval

Step

01

Confirm the site's zoning, planning upside and likely development use

Step

02

Prepare concept plans, planning advice and a realistic approval timeline

Step

03

Work out your deposit, equity and any secondary security available

Step

04

Set out the intended exit, such as refinance after DA or sale with approval uplift

Step

05

Submit the proposal to lenders that are comfortable with early stage development risk

Step

06

Settle the site, progress DA, then refinance into a standard development facility when ready

shape

Speak with a Development Finance Specialist

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Finance before development approval can be more nuanced than standard lending because the lender needs to assess planning risk, timing risk, and exit risk alongside the site's value.

A specialist can review the site's planning position and help determine whether land bank, bridging, or another early stage facility may be suitable.

Speak with a finance specialist about funding your site before approval.

Submit the short form below and a development finance specialist will review your scenario and discuss possible lending options.

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Additional Questions

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Helpful Property Finance Guide

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Guide to construction finance

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Understanding development finance

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How property refinancing works

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