Property development finance funds the land, the build and the cost to completion. We arrange development funding through non-bank and private lenders, structured around feasibility and end value rather than a one-size credit box. It is commercial, business-purpose finance for developers and builders.
Development finance covers the full cost to deliver a project: the land acquisition, construction, professional fees, holding costs and contingency, drawn progressively as the project advances. Gearing is measured against the total development cost (TDC) and the gross realisation, so the facility is sized to the feasibility, not just to the value of the land on day one.
Most development deals need more than one layer of capital. We design the whole stack, from senior debt and stretched senior through to mezzanine and preferred equity, so the structure matches the feasibility and your appetite for committing equity.
The key drivers are the loan to cost (LTC) and loan to value against end value (LVR), the development margin in the feasibility, presale cover, the strength of the builder and sponsor, and a credible sell-down or takeout. We do not advertise leverage caps or rates because they move with each of those inputs. As a general guide, a stronger margin and more presale cover supports keener terms; a stretched-senior structure that reduces or removes a separate mezzanine layer is priced for the higher risk it carries.
Stretched senior is a single senior facility geared higher than a traditional senior loan, effectively absorbing the mezzanine layer into one facility from one lender. It can simplify the stack and the intercreditor position, at a blended cost that reflects the higher leverage. Whether it beats a separate senior-plus-mezzanine structure depends on the pricing and the feasibility.
We treat funding as a full strategy, not a single loan. By designing the stack around the feasibility and taking it to a network of non-bank and private lenders, the aim is capital that preserves equity, protects the margin and repeats across your pipeline, rather than the lowest rate on one deal.
It depends on the loan to cost the structure can reach and the lender. Layering mezzanine or preferred equity above the senior debt can reduce the cash equity required, in exchange for a higher cost on those layers.
Bank-style facilities usually require presale cover. Non-bank and private lenders can consider reduced or nil presale where the feasibility, gearing and exit support it. The settings are deal-specific.
Progressively, in line with the program and quantity surveyor reports, with a retention held until practical completion and interest commonly capitalised through the build.
Loan to cost measures the loan against total development cost; loan to value measures it against the end value or gross realisation. Lenders look at both to size a development facility.
Tell us about the project, the numbers, and the timeline. We will give you an honest read on whether we can fund it and what a suitable structure could look like. Email loans@bottomlinefinance.com.au or send the form.
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