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Development Finance

What Is The Maximum Loan For Development Projects?

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Quick answer

Maximum loan sizes can range from

$500K to $100M+

Depending on the lender, project type, leverage and developer profile

  • Common private lender range $500k to $25m
  • Larger non bank or institutional deals $50m+
  • Main lending limits still depend on LVR, TDC, GRV
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The maximum loan for a development project is not a single fixed number across the market. It depends on the lender, the project size, the location, the borrower's experience, and how the lender measures risk against total development cost and gross realisation value.

In practice, smaller private and non bank construction facilities may start around a few hundred thousand dollars, while established developers with strong projects can access facilities well into the tens of millions. In some institutional or specialist first mortgage markets, facilities can exceed $100 million for large projects.

Even where a lender advertises a high maximum facility size, the real maximum loan is usually capped by leverage rules, presale requirements, profitability, exit strength, and the lender's own mandate

How maximum development loan amounts are determined

When borrowers ask what the maximum loan is for a development project, lenders usually answer in two ways. First, they look at the largest facility size their credit policy allows. Second, and more importantly, they test how much the specific project can support.

That means the true borrowing limit is generally driven by a combination of leverage settings, cost to complete, projected end values, borrower strength, and the lender's appetite for that project class.

Key factors that usually cap the maximum loan include:

  • iconMaximum LVR or maximum GRV policy
  • iconMaximum loan to total development cost
  • iconBorrower equity contribution
  • iconProfit margin and feasibility strength
  • iconPre sales, presale debt cover and exit strategy
  • iconLender mandate, capital source and project scale

Typical maximum loan ranges by lender type

There is no universal ceiling for development finance in Australia because different lenders operate in different parts of the market.

Smaller private lenders often handle short term or smaller construction projects, while larger non banks, mortgage funds and institutional lenders may fund much larger developments.

Broadly, the market often looks like this:

  • 01 Small private deals from about $500k
  • →
  • 02 Standard non bank facilities up to about $10m to $25m
  • →
  • 03 Larger specialist facilities to around $50m
  • →
  • 04 Institutional or first mortgage mandates beyond $100m

The available amount for your specific deal still depends on whether the lender is comfortable with the leverage, end values, cost buffer, and overall risk profile.

Maximum loan size versus maximum leverage

A lender may advertise a large facility size, but the practical loan limit is usually assessed through two core methods:

Method 01

Loan against gross realisation value or value

Senior debt is commonly capped as a percentage of the completed value or GRV, often around 65 percent to 75 percent depending on project strength and lender type.

Method 02

Loan against total development cost

Many lenders also cap funding to around 70 percent to 80 percent of total development cost, which means equity still needs to cover the balance plus contingencies.

Common facility spectrum $500k to $100m+
  • Many smaller and mid market lenders operate between about $500k and $25m
  • Some larger specialist mandates run to $50m and beyond
  • High facility limits do not remove the need to satisfy LVR, TDC and profit rules

The maximum loan amount is therefore a combination of lender policy and deal fundamentals. A lender might technically lend $25 million, but if your feasibility only supports $11.8 million at acceptable leverage, that lower amount becomes the real cap.

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What allows a project to reach a higher loan amount?

Lenders are usually willing to approve larger facilities when a project is stronger across multiple credit factors, not simply because the borrower wants a bigger number.

A larger maximum loan is more achievable where the feasibility is robust, the developer has experience, and the exit looks clear.

Factors that can support a bigger facility include:

  • iconStrong gross realisation value supported by valuation evidence
  • iconLower leverage against TDC and GRV
  • iconExperienced developer and capable builder
  • iconSolid presales or clear refinance and sale exit strategy
  • iconApprovals in place and complete documentation
  • iconAdequate contingencies and cost overrun buffer
  • iconProfit margin comfortably above minimum lender thresholds
  • iconAsset class and location that fit the lender's mandate
25 - 100 M+
Large facilities do exist in the market, but they are generally reserved for strong developers, proven project types, and lenders with the capital base to support bigger transactions.

Why maximum loan size is not just about the lender's headline limit

Even if a lender has the capacity to write a large facility, the approval amount still needs to fit the specific deal.

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Facility mandate

Some lenders focus on smaller projects and may cap loans at a few million, while others specialise in larger first mortgage or institutional transactions.

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Project capacity

The feasibility must support the debt. If the project's numbers only justify a lower facility, the lender will not stretch to its headline maximum just because it exists.

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Capital stack

Where senior debt does not provide enough funding, borrowers may need extra equity, a joint venture partner or mezzanine funding to complete the capital structure.

What limits the maximum loan amount?

Maximum facility size is often reduced because one or more parts of the deal do not meet the lender's risk settings

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Leverage is too high

If the requested debt pushes beyond acceptable GRV or TDC limits, the lender will reduce the approved amount

Possible solutions include:
  • icon Contribute more cash or property equity
  • icon Reduce leverage or stage the project differently
  • icon Consider mezzanine or alternative capital where appropriate
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Project size exceeds lender appetite

Some lenders simply do not operate at the required loan size, even if the deal itself is sound

Possible solutions include:
  • icon Approach lenders with larger balance sheets
  • icon Split the requirement across senior and mezzanine layers
  • icon Target lenders that specialise in larger development facilities
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Weak feasibility or end values

When profit is thin or end values are not well supported, debt capacity usually falls

Strengthening the valuation evidence, reducing costs, or improving the design outcome may increase borrowing capacity.
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Borrower profile is not strong enough

Very large facilities are usually easier to obtain for experienced sponsors with a solid delivery track record

Solutions may include:
  • icon Partnering with stronger sponsors or consultants
  • icon Seeking a smaller first project or lower debt request
  • icon Approaching lenders that accept emerging developers
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How to work out your likely maximum loan

Step

01

Prepare a full development feasibility with land cost, build cost, fees, contingencies and projected end values

Step

02

Calculate what the deal looks like at common lender settings such as 70 to 80 percent of TDC and 65 to 75 percent of GRV

Step

03

Compare that result against your available equity, the lender's mandate and the project's presale or exit requirements

Step

04

Identify which lender tier matches the project size, from private lenders through to larger specialist or institutional lenders

Step

05

Submit the project to lenders whose facility size and risk appetite align with the required debt amount

Step

06

If senior debt alone is not enough, review whether equity, joint venture funding or mezzanine finance is needed to complete the stack

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Speak with a Development Finance Specialist

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Property development finance can vary significantly depending on the project size, location, approvals, and the developer's experience.

A specialist can review your project and help determine which lenders may be able to fund it.

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