Development Finance
Site acquisition through to residual stock — finance structured around the project, not the borrower's tax return.
What we finance
Site acquisition
Including settlement finance where you need to take title quickly while DA is in motion
Construction
Small and medium residential, mixed-use, and commercial. Typically $2m-$30m end debt
Subdivision
Land subdivision and lot creation
Residual stock
Refinancing unsold stock at practical completion to release equity
Bridging and short-term
Including for developers buying their next site before the current one settles
How we work with developers
A fundable deal starts with the right structure, not the cheapest rate. Before we go to market, we will work through:
LVR and LTC parameters
Major banks, second-tier, and private credit each have a different appetite
Pre-sales requirements
And how to position your pre-sale profile against lender thresholds
GRV and feasibility review
Including QS, valuation and profit margin tests lenders will apply
Take-out strategy
Your construction loan is only as good as the exit. We model that from day one
Then we run a competitive process across the right subset of our 30+ commercial and non-bank lenders, not a shotgun submission.
Why Cumulus Capital
Lender-side experience
15+ years inside major banks. We know what credit committees push back on before submission.
Full lender panel
Major, second-tier, non-bank and private credit. We match the lender tier to the deal, not the other way around.
Structured to settle
We do not run shotgun submissions. The deal that goes to a lender is one that has been pre-walked through their policy.
Development Finance — Frequently Asked Questions
Development finance is specialist lending used to fund property development — site acquisition, construction, and associated costs. Unlike standard mortgages, it is structured around the project itself: lenders look at gross realisable value (GRV), loan-to-cost (LTC), presale profile, and the developer's track record rather than just borrower serviceability.
Most development finance is sized to the lower of 65-75% of total development cost (LTC) or 60-65% of gross realisable value (GRV). Major banks sit at the lower end with more stringent presale requirements; second-tier and non-bank lenders can stretch higher in exchange for higher pricing. Private credit can fund up to 80% LTC for the right deal.
Major bank development finance typically requires 100% debt cover from qualifying presales — enough presales to repay the loan at completion. Second-tier lenders may accept 60-80% debt cover. Non-bank and private lenders often require zero presales for the right deal, accepting higher pricing in lieu. The right structure depends on your market, timing, and appetite for marketing risk.
Pricing varies by lender tier. Major bank development finance typically prices at BBSY plus 2.5-3.5%. Second-tier and non-bank lenders price between 8% and 11% all-in. Private credit can range from 9% to 14% depending on LVR, location, and complexity. Establishment fees typically run 1-2.5% of the facility limit.
Construction terms typically run 12-24 months for residential developments and up to 36 months for larger or staged projects. Most facilities are interest-only with interest capitalised into the loan. Once construction completes, the facility either rolls into a residual stock loan or is repaid via sales.
A bank-ready development finance application includes: feasibility analysis (TDC, GRV, profit, IRR), QS report or detailed costings, site contract or title, DA or development consent, builder details with fixed-price contract, presale documentation, sponsor financials and CVs, and a clear exit strategy. We help structure this upfront rather than chasing missing pieces during application.
Yes, but the structure has to be right. First-time developers typically need an experienced builder, a smaller project scope (often six to eight dwellings maximum), a stronger equity contribution, and a clear narrative for why they can execute. We have structured first-deal facilities for new developers — the key is presenting the team and project, not the borrower alone.
Yes, most lenders include reasonable soft costs (DA fees, design fees, marketing, legals, lender fees) in the total project cost. The capacity to capitalise these into the loan depends on the LTC headroom available in the deal structure.
Have a project to discuss?
Send us the basics — site, scope, your equity contribution — and we will come back with a view on what is fundable and where.
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The information on this page relates to commercial finance for business purposes and is general in nature. Commercial finance is not regulated under the National Consumer Credit Protection Act 2009. Cumulus Capital Pty Ltd is a credit and finance broker authorised under Australian Credit Licence Number 389328 (held by Connective Credit Services Pty Ltd). Lender terms, fees and charges apply. Your full financial situation and requirements need to be considered prior to any offer and acceptance of a loan product.
