Property development finance should connect the project budget, available equity, delivery timetable and a credible repayment plan. An attractive site or projected profit is not enough: the proposed facility must work through acquisition, construction and settlement, including when costs or timing change.
This guide covers preparation for business-purpose development projects in Australia. It is not a guide to owner-occupied home loans or passive residential investment borrowing. Read our business-purpose lending policy; the actual purpose of the credit must be assessed.
1. Match the finance to the project stage
Start by explaining what the money will do. Purchasing a site awaiting approval, funding approved construction and refinancing completed stock are different proposals. Identify the current stage, approvals still required, existing debt and the milestones that must occur before repayment.
Our property development finance framework explains the wider assessment. For projects creating separate lots, use the land subdivision finance guide alongside the civil-works budget and title-registration timetable.
2. Build a complete project budget
Do not stop at the purchase price and builder’s contract. Separate costs already paid from those still outstanding, and show when each payment falls due.
- Land acquisition, transaction costs and existing debt to be repaid.
- Planning, design, engineering, consultants and authority charges.
- Construction or civil works, services and approved variations.
- Valuation, quantity-surveyor, legal and finance costs.
- Interest, holding costs, selling costs and a realistic contingency.
Have the relevant advisers confirm tax treatment and project-specific allowances. A contingency is a budget provision, not a promise that the lender will fund every overrun.
3. Calculate the equity gap—not just the loan limit
Ask what the proposed facility actually makes available for outstanding project costs. Existing debt, retained interest, fees and other allocations can leave less usable funding than the headline limit suggests. Accepted value, eligible costs and lender conditions may also differ from your feasibility assumptions.
Illustrative example: if outstanding project costs are $1 million and usable funding for those same costs is $700,000, the initial funding gap is $300,000. An additional $80,000 of costs would increase that gap to $380,000 if funding remained unchanged. These invented figures are arithmetic only—not an offered loan amount or leverage ratio.
Keep the cost and funding definitions consistent to avoid counting fees or existing debt twice. Our development-finance equity-gap guide explores this distinction.
4. Understand drawdowns and cash-flow timing
Construction funding may be released in stages subject to the facility’s conditions. Confirm the evidence required for each advance, inspection arrangements, who approves variations and whether borrower funds must be contributed first. Do not assume that a builder’s invoice immediately triggers a lender payment.
Map these steps against supplier and contractor payment dates. Ask how interest is paid or funded, what happens if the interest allowance runs out, and what conditions apply to any extension. Capitalised interest remains a cost and increases the amount to be repaid.
5. Test repayment under a weaker scenario
Document the primary exit—such as completed sales or refinance—and the evidence supporting it. Then test lower sale proceeds, delayed settlements, higher costs and a longer holding period. Refinancing is a new credit decision, not an automatic fallback.
Use our free development feasibility calculator to explore initial assumptions. Its results are estimates, not a valuation, finance approval or substitute for a detailed feasibility and professional advice.
6. Prepare a consistent assessment pack
Bring the title and ownership details, plans and approval status, costed feasibility, construction contract, delivery program, market evidence, borrower experience, financial information, equity source and repayment plan. All documents should describe the same project. Explain unresolved conditions rather than leaving them out.
For broader preparation, business.gov.au’s business-loan checklist covers finances, planning, documentation and comparing costs and conditions. A complete pack helps assessment but does not guarantee approval, pricing or settlement timing.
Discuss the project before committing
Request a project assessment with the location, development type, current stage, total cost, existing debt, available equity and proposed exit. Basic Finance Loans can explain the information needed for the next assessment step.
General information only, not financial, legal, planning, tax or investment advice. Business-purpose finance only. Terms, security, guarantees, costs and eligibility depend on lender assessment and documentation. Borrowing creates repayment obligations; default can put secured property at risk. No approval, profit or completion date is guaranteed.