Development Finance for Property Developers

Development finance is mainly for larger development, for example, commercial building, property development, building apartments, land development etc. Development finance typically operates as an interest-only, draw-down facility and the terms of the loan would typically be 6 to 24 months, depending on the size and nature of the project. Usually interest on a development loan is capitalised within the development period, with the entire loan inclusive of interest charged being repaid upon the sale of the property. Usually the interest can be rolled up into the loan, so there are no monthly payments.

Generally, lenders will lend you up to 60% to 70% of GRV (gross realisation value) and look for a minimum 20% of profit margin.

• Feasibility report
• Location and type of the proposed development
• What profit returns can project earn (minimum 20% profit margin)
• Timeline of the project
• Development plans
• Builder’s experience
• Property developer’s experience of similar size projects
• Pre-sales (Most banks look for 100% debt cover. Private lenders can waive this condition, but interest rate charged is lot higher)
• Market research
• Contingency funds
• Marketing plans of how you are going to sell them
• Exit strategy

With our partnerships with mainstream lenders and private lenders, we specialize in obtaining structured development finance for any viable project.

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