(03) 5940 5790

Development Loans & Property Development Finance

What is a development loan?

A development loan funds the purchase of a site and the construction of new dwellings or commercial space, with funds released in stages as the build progresses. Lenders assess the project's feasibility, approvals, your contribution and experience, and how the loan will be repaid, usually from sales or a refinance. PostYourLoan compares development finance from banks, non-bank and private lenders for residential, commercial and mixed-use projects across Australia.

Key points

  • Development loans are short-term and released in stages against completed work.
  • Lenders look at total project cost, expected end value, approvals, presales and your experience.
  • Your own contribution and a clear exit (sales or refinance) matter as much as the loan itself.
  • Banks, non-bank and private lenders all fund developments, with different limits and costs.

How property development finance works

Property development finance is short-to-medium-term funding for land acquisition, construction and other approved project costs. Funds are usually released in stages tied to construction milestones, and a quantity surveyor often checks progress before each payment. For a step-by-step walkthrough, see our guide on how property development loans work in Australia.

Read the full guide: how do property development loans work in Australia?

Types of development finance

TypeWhat it fundsTypically suits
Senior development loanMost of the construction cost, secured by first mortgage over the siteProjects with approvals, a builder contract and a clear exit
Mezzanine or second-ranking financeA gap between senior debt and your own contributionDevelopers who want to put in less equity, at a higher cost
Private or non-bank development financeProjects outside bank policy, or faster or more flexible structuresComplex sites, fewer presales or first-time developers
Site acquisition and land loansBuying a site before construction startsSecuring a site while approvals are obtained
Residual stock loansUnsold completed units after the development loan endsRepaying construction debt while selling remaining stock

Smaller projects may suit a construction loan or land subdivision finance instead.

Key terms lenders use

  • LVR (loan to value ratio): the loan compared with the expected value of the finished project.
  • LTC (loan to cost): the loan compared with the total cost of land and construction.
  • GRV (gross realisation value): what the finished project is expected to sell for.
  • Presales: units sold off the plan before construction, which some lenders require.
  • Capitalised interest: interest added to the loan during construction instead of paid monthly.

Every lender sets its own limits, so we compare them across lenders for your project rather than quoting a single figure.

What lenders assess

  • Approved development application or planning permit
  • A feasibility study with total costs, GRV and contingency
  • Your equity contribution
  • Builder, fixed-price contract and construction program
  • Your development experience and team
  • Presales or exit strategy (sell, refinance or hold)

Benefits of a Development Loan

Flexible Funding

Get the funds you need at various stages of your development project, ensuring continuous progress.

Compare Lender Options

We compare bank, non-bank and private development lenders so you can see the trade-offs between cost, flexibility and loan size.

Customized Loan Options

Tailored solutions that fit the unique requirements of your development project, whether it's residential, commercial, or mixed.

Risk
Mitigation

Proper funding helps mitigate the risks associated with construction delays, unforeseen costs, and project complications.

Development projects we help finance

Land Development

If you are looking to develop land for future projects, we provide funding options to help you turn raw land into valuable assets. Our finance for property development solutions can support eligible development costs and help keep your project moving forward.

Residential Development

Finance the construction of single-family homes, townhouses, or apartment buildings to meet the growing demand for housing.

Commercial Development

Secure funding to build office buildings, retail spaces, and industrial properties, driving business growth.

Mixed-Use Developments

Combine residential and commercial spaces for high-return projects with financing solutions tailored to your needs.

Land Development

If you are looking to develop land for future projects, we provide funding to help you turn raw land into valuable assets.

How we help with your development finance

1

Initial Consultation

We assess your development goals and offer guidance on loan options that align with your project’s vision.

1

Lender
Comparison

We compare development lenders and loan structures that suit your project.

2

Detailed Project Planning

Help you structure a budget and financing plan to ensure a seamless development process.

2

Application Assistance

Guide you through the paperwork, ensuring the loan application process is efficient and hassle-free.

Development finance by location

Based in Dandenong, we work with developers across Australia. Talk to us about your project.

Development loan FAQs

It depends on the lender, the project and your experience. Lenders usually expect you to contribute part of the total project cost from your own funds or equity in the site, and they set limits on both loan-to-cost and loan-to-value. We compare these limits across lenders for your project.

Yes, but options are narrower. Lenders look for an experienced builder and project team, a sound feasibility and a larger contribution. Non-bank and private lenders are often more open to first-time developers, usually at a higher cost.

A construction loan usually funds building one home for you to live in or rent. A development loan funds projects built to sell or hold, such as townhouses, units or commercial space, and is assessed on the project’s feasibility and exit.

Some lenders require presales, especially for larger residential projects. Others, often non-bank or private lenders, will fund with fewer or no presales, usually at a higher cost.

It’s short-term finance, usually matched to the construction program plus time to sell or refinance the completed project.

In progress payments as each stage of construction is completed, usually after a quantity surveyor confirms the work.

Related Services