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Development Finance
How do you get Finance for a property Development?
6 min read- Finance Guide
- Updated 2026
Getting finance for a property development involves presenting a viable project to a lender that specialises in development funding. Unlike standard property loans, development finance is assessed based on the feasibility of the project, the expected end value, and the developer's experience. Lenders review the total development cost, projected profit, planning approvals, and the amount of equity contributed before approving funding.
For many
projects,
finance is structured as a construction facility where funds are released in
stages
as
the development progresses.What projects does development finance cover?
Property development finance is designed to fund projects where property will be built, subdivided, or significantly improved before being sold or refinanced. Typical projects funded include:
-
Townhouse developments -
Apartment developments
-
Land
subdivisions
-
House and land projects
-
Mixed-use developments
-
Commercial developments
Lenders normally assess several core elements before approving a development loan.
Development feasibility
A financial feasibility study shows whether the project is commercially viable.
It usually includes:
Land purchase
price- Construction
costs
- Professional
fees
- Marketing and sales
costs
- Contingency
allowances
- Total development
cost
- Projected sale
values
- Expected developer
profit
15-20%+
Profit margin lenders want to see
20-35%
Typical developer equity contribution
6
Construction drawdown stages
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Planning approval
Many lenders prefer developments that already have planning approval or development permits.
Projects with approved plans generally have easier access to finance because planning risk has already been removed.
However, some lenders will finance:
-
Sites awaiting approval
-
Development approval (DA) funding
-
Land
banking projects
Developer Equity
Development finance normally requires the borrower to contribute equity.
Typical project cost split
eveloper Equity
20-35%
Lender Finance
65-80%
Equity sources accepted
- Cash
deposit
- Equity in
existing property
- Value of the
development site
Construction Funding Structure
Development loans are usually drawn down in stages during construction.
Funds are typically released at stages such as:
-
Land
settlement
-
Slab
stage
-
Frame stage
-
Lock-up stage
-
Fit-out stage
-
Completion
A quantity surveyor confirms the work completed before each drawdown is released.
Pre Sales Requirements
Larger developments may require pre sales before construction begins
Pre sales provide lenders with contracts showing that buyers are committed to purchasing the completed properties
Smaller developments often do not require pre sales depending on the lender
Common problems developers face
Many developers struggle to obtain finance because one or more parts of the project are not fully prepared.
Low deposit or equity
Some lenders require substantial equity contributions.
Possible solutions include:
- Use equity from
other property
- Joint venture
funding
- Private
development lenders
No development experience
First-time developers can find it difficult to obtain funding without a track record
Solutions may include:
- Partner with an
experienced developer
- Start with a
smaller project
- Use first-timer
specialist lenders
Incomplete documentation
Lenders need clear documentation before approving development funding.
Common missing items include:
- Construction cost
estimates
- Feasibility
reports
- Planning
approvals & contracts
Unrealistic Feasibility
If projected profits are too small, lenders may decline the project
Solutions may include:
- Adjust project
structure or density
- Reduce
construction costs
- Improve projected
end values
Steps to get finance
-
1
-
2
Prepare plans and obtain planning approval
Get development plans drawn and apply for planning approval where possible
-
3
Estimate costs and complete a feasibility study
Document all costs, contingencies, and projected sale values to show 15–20%+ profit
-
4
Determine your equity contribution
Identify how much equity you can contribute from cash, existing property, or the site
-
5
Submit to specialist lenders
Present your full project documentation to lenders that specialise in development finance
-
6
Receive staged construction funding
Once approved, funds are released at each confirmed stage of the build
Speak with a Development Finance Specialist
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.
Speak with a finance specialist about your development project.
Submit the short form below and a development finance specialist will review your project and discuss possible funding options.
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Call us to discuss your development project
1300 000 000
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