Development Finance
Development Finance in Australia: Feasibility, LTC, GRV, Presales and Exit
Development funding is assessed as a project risk, not just a property loan. The core questions are feasibility, leverage, delivery risk, presales, and exit.
AI-supported lender matchingBroker-reviewed funding strategyCommercial finance support across Australia
Quick answer
Development lenders test whether the project can be completed, sold, and repaid
Development finance lenders usually assess the project feasibility, loan-to-cost, gross realisation value, approvals, presales, borrower and builder experience, contingency, cost-to-complete, equity contribution, and exit strategy. The lender wants to know whether the project can be built within budget, whether sales or refinance can repay the facility, and whether enough buffer exists if costs or timing move.
A strong project is not just one with a high end value. It is one where the numbers, approvals, delivery plan, equity, and exit all work together.
Core development funding tests
- Feasibility and cost-to-complete.
- Loan-to-cost and borrower equity.
- Gross realisation value and valuation support.
- Presales, rental exit, refinance exit, or sale strategy.
- Builder strength, permits, contingency, and delivery risk.
What lenders test
Development finance has more moving parts than standard property lending
Each project needs to be assessed across capital stack, delivery risk, market demand, and repayment pathway.
Feasibility
The lender reviews the cost plan, purchase price or land value, professional fees, contingency, interest, sales assumptions, and expected margin.
LTC and GRV
Loan-to-cost and gross realisation value help lenders size the facility against both project cost and end-value expectations.
Presales and exit
Presales, rental hold, refinance, or sale strategy all affect how the lender expects to be repaid.
Common scenarios
Where development funding structure changes
These project patterns usually need lender-path review before a funding route is chosen.
Small residential development
The lender may focus on approvals, builder contract, contingency, presales, and borrower equity.
Commercial or mixed-use project
Valuation, leasing, market depth, and exit strategy can matter more than a simple residential presale test.
Landbank or early-stage site
The file may need a different funding path if approvals, construction contract, or exit are not yet ready.
Fit and limitations
Development finance can fail when one major assumption is weak
A project can look profitable in a feasibility and still struggle for finance if presales are thin, contingency is low, builder risk is high, approvals are not ready, or the exit depends on optimistic end values.
The broker review should test the project as a whole rather than relying on one strong metric.
Common weak points
- Feasibility that relies on optimistic sales values.
- Insufficient contingency or borrower equity.
- Unclear approvals or builder position.
- Presales that do not satisfy lender expectations.
- Exit strategy that depends on a narrow refinance or sale outcome.
AI-supported review
AI-supported matching helps keep the development file coherent
Balmoral's workflow helps organise feasibility, LTC, GRV, approvals, presales, cost-to-complete, equity, and exit into a structured review before the lender path is chosen.
The output still needs broker and lender review because development finance depends on project-specific facts and current lender appetite.
Useful signals
- Missing project documents.
- Leverage pressure against cost and end value.
- Presale or exit gaps.
- Delivery risks that need explanation.
FAQ
Questions borrowers ask before moving
What is the most important metric in development finance?
There is no single metric. Lenders usually look at feasibility, LTC, GRV, equity, approvals, delivery risk, presales, and exit together.
Are presales always required?
Not always. Requirements vary by lender, project, market, borrower strength, leverage, and exit strategy.
Can AI assess a development finance project?
AI can help organise the project facts and highlight gaps, but broker and lender review are still required before any funding path is treated as viable.
Can Balmoral compare bank, non-bank, and private lender pathways?
Yes. The first pass is designed to clarify whether the strongest path looks more like a bank, non-bank, or private lending conversation.
Does AI-supported lender matching guarantee approval?
No. It helps organise the scenario and compare lender pathways faster, but lender approval still depends on the deal, the borrower, and the chosen lender's credit process.
Next step
Review the development funding path before lender approach
If the project depends on feasibility, presales, leverage, builder position, or exit, submit the scenario so the lender path can be reviewed before market approach.
Disclaimer
Finance is subject to lender approval. Terms, fees, rates and eligibility vary by lender and borrower circumstances. AI-supported lender matching does not guarantee approval. Balmoral reviews scenarios through a commercial finance broker before recommending a funding pathway.