A development can be commercially sound and still lose time at the finance stage. The issue is often a gap between the project programme, lender assessment, valuation, legal work and the documents required before funding can move.
For developers with land, planning approval or a project close to site start, development funding before construction starts is mainly about timing and preparation. Lenders need a clear view of the site, approved scope, cost base, builder, equity contribution, sales position and exit pathway.
Blue Crane Capital works across development and construction finance, from land and construction through to bridging, staged drawdowns, non-bank finance and private credit.
The goal is to get the finance workstream moving early enough that it does not hold up construction.
Key Takeaways
- Work backwards from the site-start or settlement date. Valuation, credit review, loan documents and conditions all take time.
- Build one lender-ready project pack. Keep approvals, feasibility, cost plan, builder documents, equity evidence, presales and exit information current.
- Treat contingency as part of the funding case. Lenders want to see how the project can absorb cost movement and reach completion.
- Match the lender to the project stage. Banks, non-bank lenders and private credit providers can assess the same development differently.
- Review blockers before submission. Missing certificates, unsigned contracts, unclear equity or valuation issues can slow settlement.
If your start date is set, Blue Crane Capital can review the scenario and map a funding pathway against the deadline.
What needs to be ready before construction funding
Construction finance is assessed on the full project, rather than the land alone. A lender is looking at whether the project can move from its current stage to completion within an acceptable lending structure.
For developers assessing development finance, the lender pack will usually need to show how planning, construction costs, borrower equity and the repayment pathway fit together.
| Area | Common documents or evidence | What the lender is checking |
| Planning | Development consent, approved plans, consent conditions, certificate status | Legal scope and outstanding conditions |
| Project economics | Current feasibility, cost plan, GST treatment, contingency, realisation | Whether the funding request fits the project |
| Builder | Executed contract, builder profile, programme, licence and insurance | Delivery capability and contract risk |
| Borrower | Entity structure, financial information, existing debt, project history | Financial position and experience |
| Equity | Land value, cash contribution, evidence of funds, site debt | Borrower capital already committed or available |
| Sales and exit | Presales, deposit evidence, sale or refinance plan | Repayment pathway |
Common lender inputs may include:
- DA documents
- current feasibility
- valuation
- builder information
- construction contract
- presales
- borrower financial information
- entity structure
- project timeline
- exit strategy
For development funding before construction starts, these documents should tell the same financial story.
For example, if the feasibility shows construction costs of $8 million but the signed building contract is $8.8 million, the lender may ask how that difference will be funded. An updated cost plan and equity position can help address that question before credit assessment progresses.
A clear development funding submission gives the lender one current version of the project to assess.
Planning approval, construction certificates and lender timing
Planning status can have a direct effect on construction finance timing.
Different developments can move through different planning approval pathways depending on the site, development type and relevant planning controls. Developers should know which pathway applies and what remains outstanding before construction.
Development consent does not mean every pre-construction requirement has been completed.
A lender may ask:
- Are pre-construction consent conditions complete?
- Has the relevant Construction Certificate been issued or lodged?
- Do the valuation drawings match the approved drawings?
- Has the scope changed since planning approval?
- Are consultant reports still outstanding?
- Can the builder mobilise once finance conditions are met?
The NSW planning system provides a guide to the DA process covering the steps that can occur from application preparation through assessment and determination. For developers, understanding where the project sits in that process can make lender discussions more precise.
Finance should run beside the project programme
Do not treat finance as a task that begins once every other project item has been completed.
A practical sequence may look like this:
| Project point | Finance task | Main risk |
| DA approved or near approval | Start lender and structure review | Lender fit tested too late |
| Builder and cost plan progressing | Prepare feasibility and lender pack | Cost figures change during assessment |
| Certification progressing | Order valuation and close document gaps | Final documents delay credit |
| Finance approval issued | Complete legal documents and conditions | Equity or security items delay settlement |
| Construction ready | Set up first draw process | QS or draw conditions remain open |
National data on building approvals in Australia can provide useful context on the level and movement of approved residential building activity.
Approval data should not be read as construction-start data. There can be a considerable gap between gaining approval and moving to site commencement.
That same principle applies at the individual project level. Planning approval, lender approval and readiness to draw construction funds are separate milestones.
Builder contracts, cost plans and contingency evidence
Builder and cost information sits at the centre of property development finance Australia assessments.
The lender needs to know:
- who will build the project
- how much the works are expected to cost
- what is included in the contract
- where cost uncertainty remains
- how overruns could be funded
- how much equity has been committed
Builder documents
Common items can include:
- executed building contract and contract price
- builder licence and insurance details
- construction programme
- builder company information
- quantity surveyor reports
- provisional sums
- variation provisions
- evidence supporting major cost allowances
A lender may review the builder alongside the developer. Previous project experience, current workload, contract type and financial position can influence the assessment.
Keep the cost plan current
The project feasibility should reconcile with the building contract and other expected project costs.
This can include:
- construction costs
- consultants
- authority charges
- statutory costs
- marketing and selling expenses
- interest
- lender fees
- GST
- contingency
Cost movements can affect both the size of the facility and the equity contribution required from the borrower.
ABS construction price data provides one source for monitoring broader movements in construction costs. Market-wide figures do not predict costs for one project, but they can reinforce the value of working from current quotes and contracts.
Contingency needs evidence
A contingency should be more than a percentage entered into the feasibility.
The lender may want to know what happens if:
- construction costs increase
- a provisional sum moves
- sales are delayed
- settlement proceeds are lower than expected
- the construction programme runs longer
- interest costs rise from a longer loan term
For residential projects, the ABS overview of the finance process for residential construction provides useful background on how finance, approvals and construction activity interact across the broader development cycle.
For an individual borrower, the practical question is simpler: does the facility and equity position still support completion if the original project assumptions move?
When a non-bank or private lender may be considered
A major bank is one potential funding source. It is not the sole lending pathway available for property development.
Non bank lending may become relevant where the project does not fit standard bank policy or where the timing, leverage, presales, borrower profile or security requires a different assessment approach.
Common scenarios can include:
- tight site settlement timing
- lower presales than a particular lender requires
- land or bridging finance before construction funding
- unusual security
- capitalised interest requirements
- refinance or completion funding
- a previous lender reducing its proposed facility
- a bank decline linked to credit policy
Private credit can form another part of the lender market.
The comparison should focus on the complete lending structure rather than one pricing figure.
| Funding source | Potential fit | Points to assess |
| Major bank | Policy-aligned project with clear approvals and borrower strength | Credit timing, presales, leverage and conditions |
| Non-bank lender | Project-specific structures outside standard bank policy | Interest, fees, leverage, draw process and exit |
| Private credit | Bridging, shorter transaction windows or non-standard structures | Total cost, security, term, extension terms and repayment pathway |
Compare the total facility
Developers should review:
- interest rate
- establishment fees
- line fees
- valuation costs
- quantity surveyor costs
- legal fees
- loan term
- extension provisions
- leverage
- presale conditions
- draw requirements
- interest capitalisation
- security
- guarantees
- exit requirements
A more flexible lender may have a higher cost of capital. That structure can still warrant assessment where timing or policy makes another lender unsuitable.
The question is whether the funding structure makes commercial sense for the project.
Developers looking for a finance broker in Sydney can use a scenario review to compare lender appetite across bank, non-bank and private credit markets before committing to one pathway.
Common blockers that slow settlement
Many settlement problems start well before loan documents are issued.
Finding them early gives the borrower more time to respond.
Approval mismatch
The lender and valuer need to assess the project that will actually be built.
Revised plans, extra dwellings, altered floor areas or changes to the consent can trigger further questions.
Stale feasibility
A feasibility prepared months earlier may no longer reflect:
- current construction cost
- professional fees
- interest
- sales values
- GST
- contingency
- existing debt
Refresh the model before the lender relies on it.
Unsettled building contract
Unsigned contracts, unresolved provisional sums and unclear variation terms can delay a credit decision or settlement conditions.
Unclear equity
Land equity can form part of the borrower contribution in some lending structures.
The lender may still assess:
- current land value
- debt secured against the site
- cash already spent
- remaining cash contribution
- source of funds
A developer’s estimate of site equity may differ from the lender’s position after valuation.
Late valuation
Development valuations often depend on several project documents.
A valuer may require:
- approved plans
- feasibility
- construction costs
- sales evidence
- presale contracts
- tenancy information for relevant projects
- project programme
Ordering the valuation before the required information is ready can create its own delay.
Presale gaps
The number of presales is only one part of lender assessment.
The lender may review:
- contract price
- deposit paid
- purchaser profile
- related-party sales
- settlement conditions
- concentration
- contracts exchanged
- expected settlement timing
Weak exit detail
Every development facility requires a repayment pathway.
This may involve:
- settlement of completed property sales
- refinance to an investment facility
- residual stock finance
- sale of the completed asset
- another documented repayment source
A vague exit can make credit assessment harder.
Drawdown preparation left too late
Finance approval does not mean the full loan amount is paid to the borrower on day one.
Construction facilities commonly release funds through staged drawdowns.
The developer may need to provide:
- progress claim
- QS report
- invoices
- confirmation of completed works
- updated cost-to-complete figures
- insurance documents
- evidence that required equity has been contributed
Blue Crane Capital’s broader approach to property lending and lender access can be found on the about Blue Crane Capital page.
Speak with Blue Crane Capital Today!
Development funding before construction starts is easier to manage when finance is treated as part of the project programme rather than a final task after approvals and builder negotiations.
The lender needs a current view of the project. The developer needs a realistic view of timing, conditions, cost and draw requirements.
Blue Crane Capital can review the project stage, documents, equity position, lender access and settlement deadline, then outline funding pathways that may suit the transaction.
Speak with Blue Crane Capital about your site, approval status, project numbers and target construction date.
FAQs: approvals, valuations, land equity and presales
Can development finance be discussed before DA approval?
Yes. Early finance discussions can identify likely lender requirements, documentation, equity expectations and potential project risks.
A formal construction facility may still depend on planning approval and other lender conditions.
Starting the discussion earlier can give the developer more time to compare lending structures.
Do I need a Construction Certificate before finance approval?
Not in every scenario.
A lender may assess the project and issue an approval subject to final certification. The required approvals will depend on the project, lender and facility structure.
Construction should not commence until the required statutory approvals are in place.
Can land equity count as my contribution?
Potentially.
A lender may consider the site’s current value, existing debt and acquisition history when working out the borrower’s equity position.
For example, a site valued at $5 million with $2 million of existing debt has $3 million of gross equity before other lender adjustments.
The amount accepted for a development funding structure remains subject to valuation, lender policy and the rest of the transaction.
What valuation does a development lender use?
Development finance can involve more than one valuation figure.
A report may consider:
- current site value
- gross realisation value
- net realisation value
- completed project value
- comparable sales
- presales
- construction costs
The lender then applies its own credit policy to the valuation.
Are presales always required?
No. Presale requirements vary across lenders and projects.
Some lenders may require a defined level of qualifying presales before construction funding. Others may assess projects with fewer presales or no presales where the broader credit position supports that structure.
Different terms, leverage levels or pricing may apply.
Disclaimer: This article provides general information about property finance. It does not take into account your objectives, financial situation or particular requirements. Lending criteria, fees, rates and conditions vary. Seek legal, tax or financial advice where relevant.