Private development finance provides flexible funding for property development projects when banks decline or move too slowly.
What is Private Development Finance?
Private development finance funds residential or commercial property development through private lenders, with more flexibility than banks.
Why Developers Use Private Finance
Banks decline development finance for:
- First-time developer (no track record)
- No presales yet
- Unique/complex project
- Higher leverage needed (>65% LVR)
- Smaller developments (<$2M)
- Fast start required
Private lenders offer: ✅ Faster approval (2-4 weeks vs 8-12) ✅ Less experience required ✅ No/minimal presales ✅ Higher LVR (up to 75%) ✅ Flexible structure
Private Development Finance Rates
Interest Rates:
- Standard: 10-14% p.a.
- Higher risk: 14-18% p.a.
- Plus line fees: 0.5-1.5% upfront
Total Cost Example: $1.5M development loan @ 12% p.a., 18 months:
- Interest: $270,000
- Line fee (1%): $15,000
- Total: $285,000
Structure
Progressive Drawdowns:
- Land purchase: 30-40%
- Base/foundations: 15-20%
- Frame/lock-up: 25-30%
- Fixing/completion: 20-25%
Approved by quantity surveyor inspections
Requirements
✅ Feasibility study showing profit ✅ Development approval (DA) ✅ Builder quote/contract ✅ 25-35% equity contribution ✅ Exit strategy (presales or takeout finance)
Ready to fund your development? Connect with private development lenders.