Acquisition and construction
Finance eligible land settlement and staged construction within approved gearing and equity limits.
Finance structured around cost, GRV and delivery.
Property development loans can help fund eligible land acquisition, subdivision and construction, or refinance an existing project. The funding structure depends on the project stage, accepted gross realisation value (GRV), total development cost, available equity and a credible repayment plan. Use this guide to understand the funding gap, staged drawdowns and evidence needed for lender assessment.
Still choosing your pathway? Start with our property development loans overview, then return here to examine the funding structure.
The predominant use of funds must be genuine, documented and compatible with lender policy.
Finance eligible land settlement and staged construction within approved gearing and equity limits.
Replace existing project debt and fund verified cost to complete where feasibility and delivery remain credible.
Support selected land subdivision projects with approvals, budgets, sales and staged release evidence.
Refinance completed eligible stock while sales or longer-term refinance proceeds are realised.
The lender tests more than GRV. Cost, sponsor equity, approvals, presales, delivery capability, contingency and repayment timing must work together.
| Development pathway | Indicative leverage basis | Typical term profile | Location appetite | Critical evidence |
|---|---|---|---|---|
| Acquisition and construction | Assessed against accepted land value, total development cost and GRV; up to 80% GRV only for selected qualifying projects | Development program plus an appropriate settlement and completion buffer | Australia-wide enquiries; strongest appetite in metropolitan and established regional markets | Planning, feasibility, cost report, equity, builder, presales and verified exit |
| Land subdivision | Case-specific against as-is value, civil costs, total development cost and accepted GRV | Staged term aligned to approvals, civil works, titles and lot settlements | Metropolitan growth corridors and established regional markets; remote locations assessed individually | Permits, engineering, civil contract, contingency, presales, release prices and title timing |
| Cost-to-complete finance | Conservative assessment of current value, existing debt, verified remaining costs and completed value | Short-term completion and stabilisation structure | Projects with demonstrable market depth and a credible completion pathway | QS report, remaining works, builder position, arrears, contingency, revised program and exit |
| Development exit or refinance | Based on completed or near-completed accepted value after existing payouts, interest and costs | Short-term sale, refinance or settlement runway | Marketable projects in metropolitan and established regional postcodes | Completion status, titles, defects, sales evidence, payouts, net proceeds and repayment plan |
| Residual stock finance | Based on accepted completed-stock value, remaining senior debt and progressive release mechanics | Short-term sell-down or longer-term refinance transition | Completed marketable stock with supportable demand and valuation evidence | Stock schedule, valuations, contracts, release prices, sales velocity, holding costs and exit |
Important: these are not offers or guaranteed parameters. Loan amount, LTC, LVR, GRV, term, presales, pricing, location appetite and timing are subject to lender criteria, valuation, due diligence, documentation and formal approval. Basic Finance may act as a direct lender or facilitate finance with an appropriate lender.
Illustrative example only — not a client case, lending offer or indication of available terms. Imagine a small townhouse project refinancing its land debt before construction. Assume the assessed gross facility limit is $3 million.
Start with the deductions: $900,000 repays the existing land loan and $300,000 is allocated within the facility for interest and finance costs. That leaves $1.8 million potentially available for staged project costs, not a $3 million cash advance.
If the remaining construction and other project costs, including contingency but excluding the land payout and finance costs already counted above, total $2.1 million, the project has a $300,000 funding gap. This is additional funding still required, not the developer’s total historical equity contribution. Drawdown conditions also determine when funds become accessible.
If revised remaining costs rise by $150,000 after allowing for the existing contingency, the gap becomes $450,000, assuming the facility and other inputs stay unchanged. A three-month settlement delay requires a separate review of interest, holding costs and the loan expiry date. Do not assume an extension or a larger facility will be available.
Before proceeding, reconcile the lender’s net funding schedule with the cost-to-complete budget and identify how any shortfall will be met. Check which costs are inside the facility, which are paid separately and when equity must be contributed. Actual amounts depend on the accepted valuation, lender conditions and verified project evidence.
For the leverage calculation behind this example, read our development finance equity-gap guide, then test your own assumptions in the calculator below.
Bring your project assumptions together and explore how cost, forecast GRV and the selected debt limits affect the indicative equity requirement.
Open the feasibility calculator →
For a simple worked example, read why GRV alone does not determine your development equity gap.
For a Melbourne or Victorian project, bring the site-specific approval position, development budget and repayment evidence into the same funding assessment. A postcode alone does not establish eligibility or the amount available.
Provide the site address, proposed use, current plans and any planning permit, conditions and expiry dates. Planning and building permits are different approvals; confirm the requirements for your proposal with the relevant authority and your planning or building adviser. See the Victorian Government’s guide to planning permits.
For townhouse or multi-unit construction, set out the building contract, cost report, contingency and staged drawdown program. For subdivision, identify civil works, servicing costs, title timing and proposed lot settlements. Our land subdivision finance guide explains the related assessment pathway.
Support proposed sales or refinance with evidence relevant to the location and finished product. Show how a slower sell-down, lower accepted valuation or construction delay would affect interest, available equity and repayment. Use the development feasibility calculator to explore the assumptions before submitting a scenario.
Selected business-purpose projects are considered subject to lender criteria, valuation, due diligence and formal approval. Share your project details for a scenario review.
For more detail on credit-history assessment and supporting evidence, read our guide to property development loans with adverse credit.
The sequence and evidence required vary by lender and project. An initial discussion or indicative proposal is not formal approval or a commitment to fund.
Share the site, approvals, development budget, existing debt, available equity and proposed exit. If a potential funding pathway is identified, review indicative leverage, pricing, fees and conditions before committing to further assessment costs.
The lender assesses the accepted value and GRV alongside the feasibility, builder, contract, presales and remaining costs. A valuation and quantity surveyor or other cost report may be required. A lower valuation or higher verified cost can change the proposed facility and equity required.
Check the written approval and loan documents with your solicitor. Confirm security, guarantees, equity contributions, insurance, fees and all conditions required before settlement. Approval subject to outstanding conditions does not mean funds are ready to draw.
Settlement may pay out existing debt or complete the land purchase; it does not necessarily release the construction budget. Later advances depend on the facility conditions and may require progress claims, inspections or cost-to-complete checks. Confirm who authorises each draw and how cost overruns or delays will be funded.
Before setting a payment deadline: ask what remains outstanding for settlement or the next draw. Do not promise a builder payment based only on indicative terms, or assume an extension or additional funding will be approved.
Yes. Basic Finance considers enquiries from first-time property developers on a case-by-case basis. Assessment considers the project, available equity, approvals, builder and professional team, feasibility and proposed repayment strategy. Finance remains subject to lender criteria, verification, due diligence and formal approval; being a first-time developer does not guarantee access to funding.
There is no single equity percentage for every project. The contribution depends on the lender-approved facility, accepted project costs, existing debt and the timing of drawdowns. An advertised maximum of 80% of GRV does not mean that 20% of development costs will be enough. Bring your cost report, existing loan payouts and evidence of available equity so the funding gap can be assessed against the proposed facility.
Up to 80% of accepted GRV may be considered for selected qualifying projects. Cost-based gearing, equity, presales, location, experience and risk can require lower leverage.
Selected eligible projects may be considered up to $50 million, subject to lender appetite, scale, valuation, cost, sponsor, security, exit and approval.
Gross realisation value is the accepted estimated aggregate value of the completed project. It is not guaranteed sale proceeds and does not deduct selling costs, tax or debt.
Lenders commonly use quantity-surveyor reports, inspections, invoices, equity-first conditions, contingency controls and certified draw requests.
Requirements vary. Project type, location, leverage, sponsor strength, market evidence and exit can affect presale conditions.
Possibly, where title, current debt, as-is value, cost to complete, defects, approvals, builder plan, contingency and exit are independently verified.
Share those facts so we can identify the information required for a meaningful assessment.
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All finance is subject to lender assessment, due diligence and approval. Fees, charges and eligibility criteria apply.