Property development finance is rarely a question of finding one lender with the lowest headline rate.

The lender category can affect leverage, equity requirements, presales, loan conditions, construction drawdowns, facility terms and the exit strategy. For a developer working to a settlement deadline or construction program, those differences can have a direct effect on whether the proposed lending structure fits the project.

That makes the choice between bank, non-bank and private credit an important part of assessing property development finance pathways.

The Australian property lending market gives borrowers access to several sources of capital. APRA reported that authorised deposit-taking institutions had $487.6 billion in commercial property exposures at March 2026, up 8.7% from March 2025.

At the same time, non-bank and private credit markets have become more active. The result is greater lender choice, but a wider range of structures, costs and credit requirements to assess.

Key Takeaways

Start with the project, not the lender. Project stage, equity, feasibility, presales, builder position, timing and exit can determine which funding pathway is realistic.
Bank finance may suit policy-aligned projects. Strong documentation, sufficient equity, acceptable presales and an established track record can support a bank assessment.
Non-bank lending can provide greater policy flexibility. A non-bank lender may consider scenarios that sit outside a bank’s preferred credit settings, including some early-stage or lower-presale projects.
Private credit can suit more complex or time-sensitive scenarios. The trade-off may include higher borrowing costs, shorter terms and closer attention to the refinance or sale exit.
Compare the whole lending structure. Rate is one part of the decision. Fees, leverage, conditions, drawdowns, covenants, extension rights and exit costs can change the commercial result.

If your project does not fit neatly within one lender policy, Review Your Lending Options across more than one funding pathway before committing to a structure.

Why the lender path matters as much as the facility

Two lenders can offer the same loan amount and produce very different outcomes for the borrower.

Consider a developer with a DA-approved site, an appointed builder and limited presales. One lender may place heavy weight on qualifying presales. Another may accept a lower presale position but require more developer equity. A third may focus more heavily on the completed value, sponsor strength and a clear exit.

The loan amount alone does not show those differences.

A useful development finance assessment should examine factors such as:

project stage and remaining approvals
site value and existing debt
total development cost
developer equity already contributed
construction contract and builder profile
contingency allowance
presales, where relevant
expected gross realisation
proposed loan term
interest and fee structure
drawdown requirements
refinance or sale exit.

Broader construction activity can provide useful market context when assessing project pipelines and local development conditions. Developers can track current building approvals in Australia through the Australian Bureau of Statistics.

The RBA reported in February 2026 that the supply of business credit has been supported by stronger lender competition and growth in specialist non-bank and private credit lenders. It found that the non-bank share of business lending had increased strongly since 2022. Its data showed the largest increase in non-bank market share from 2019 to 2025 occurred in residential construction lending.

For developers, this means a bank decline or policy mismatch does not automatically define the full lending market. It does not mean another lender will approve the project either. Each pathway requires its own assessment.

Bank finance: where it can fit

Banks remain a major source of property and development funding in Australia.

Their assessment is commonly policy-driven. Credit teams may review the project, borrower, security and repayment strategy against defined lending standards.

What a bank may assess

For property development finance, the assessment may cover:

Loan-to-value ratio: The proposed debt compared with the property’s accepted value.
Loan-to-cost ratio: The debt compared with the total project cost.
Developer equity: How much capital the borrower has contributed or can contribute.
Presales: Contracted sales secured before or during construction.
Developer experience: The borrower’s history with comparable projects.
Builder position: Contract terms, builder experience and financial position.
Feasibility: Expected revenue, development costs, contingency and projected margin.
Security: The property and any other security supporting the facility.
Exit: How the debt is expected to be repaid at completion.

Presale policy deserves close attention. APRA clarified in February 2025 that its earlier commercial property guidance was not intended to create a fixed minimum presale requirement. The RBA later reported that some lenders had reduced presale requirements, yet lenders remained focused on project fundamentals, location, builders and developer quality.

This means presales remain a lender-specific credit issue rather than a single market-wide rule.

When bank finance may be worth assessing

A bank pathway may fit a project with:

clear financial records
a proven development history
sufficient borrower equity
an acceptable builder and contract
strong project feasibility
acceptable presales where requested
a clear completion and repayment plan
enough time for the lender’s credit and documentation process.

Pricing through a bank may be attractive for a project that fits credit policy. Cost still has to be assessed beside leverage, timing, conditions and the amount of equity tied up in the transaction.

Non-bank lending: where it may create flexibility

A non-bank lender provides credit without operating as a deposit-taking bank.

The category covers a broad group of lenders, so policies can differ materially from one provider to another. Blue Crane Capital’s non bank lending service provides a pathway for borrowers assessing options outside traditional bank credit settings.

The RBA notes that non-banks can operate in areas where banks are less active, including early-stage construction finance. It links part of this activity to different prudential constraints and greater capacity to fund transactions that may be too capital-intensive for a bank under its credit model. Read the RBA’s analysis

What flexibility can look like

Depending on the lender and project, non-bank development finance may provide different settings around:

presale requirements
acceptable project stage
developer experience
gearing
documentation
construction commencement
residual stock
refinance scenarios
loan term
credit approval process.

RBA liaison reported in March 2026 that some non-bank lenders had modestly eased terms for property developers, including less stringent presale requirements and some reductions in collateral requirements. These changes were not uniform across the market.

That distinction matters.

“Non-bank” does not mean loose credit. A lender may accept one risk that a bank will not accept, then seek protection elsewhere in the lending structure.

For example, greater presale flexibility may come with a different leverage position, interest margin, fee structure, security requirement or loan term.

Look beyond the headline rate

When comparing a non-bank lender with a bank, review the total commercial effect of the facility.

Check:

establishment fees
interest calculation
interest capitalisation
valuation and quantity surveyor costs
line fees or undrawn fees
exit fees
minimum interest periods
extension costs
default rates
conditions before each drawdown.

A development finance broker can help place these terms into the context of the full project feasibility rather than comparing the interest rate in isolation.

Private credit: key risks and suitability checks

Private credit is funding provided outside traditional bank lending, commonly through investment funds, asset managers, private lenders or other pools of investor capital.

It has become a more visible part of Australian property finance.

Estimates of the market vary depending on what is counted. The RBA estimated around $50 billion in Australian private credit outstanding at December 2025. It cited a separate estimate of $224 billion in assets under management in late 2025 and noted gaps in available data.

ASIC has used an estimate of about $200 billion for the broader Australian private credit sector and reported that roughly half may be invested in real estate-related assets. These figures measure the sector in different ways, so they should not be compared as identical measures.

The RBA reported in March 2026 that non-bank lenders represented about 6% of Australian financial system assets and private credit represented less than 2%.

When private credit may enter the assessment

Private credit property finance may be assessed for scenarios involving:

short settlement periods
land or DA funding
construction funding gaps
limited presales
partially completed projects
residual stock
expiring facilities
refinance before project completion
transactions outside standard bank policy.

Private credit is not automatically the right answer when bank finance is unavailable. The facility still has to make commercial sense against the project’s expected timeframe and exit.

Check the structure carefully

Borrowers should understand:

Area	Questions to review
Loan term	Is the term long enough for construction, completion and the planned exit?
Total cost	What interest, establishment, line, legal, valuation, monitoring and exit costs apply?
Extensions	Can the loan be extended and what conditions or fees apply?
Drawdowns	What evidence is required before construction funds are released?
Covenants	What events could trigger a default or lender review?
Security	What property, guarantees or other security is required?
Exit	Is repayment based on sales, refinance, residual stock finance or another defined source?
Delay case	What happens to cost and facility expiry if construction runs late?

ASIC’s 2025 review of private credit fund practices identified issues requiring closer industry attention, including fee transparency, related-party transactions, governance, valuation practices and inconsistent terminology. These findings relate to private credit fund management rather than the terms of every borrower facility, but they show why transparency and counterparty assessment matter in this part of the market. View ASIC Report 814 information

How to compare structure without chasing a simple answer

There is no single hierarchy where bank finance is always first, non-bank second and private credit last.

The correct sequence depends on the transaction.

Factor	Bank	Non-bank	Private credit
Credit policy	More standardised	Can offer broader settings	Often transaction-led
Presales	Can be significant for development projects	May provide greater flexibility	May accept different presale structures
Documentation	Usually comprehensive	Varies by lender	Transaction-specific
Pricing	Often lower for policy-aligned projects	Commonly higher than bank funding	Commonly higher again for complex risk
Timing	Depends on credit process	May suit tighter transaction windows	Can suit time-sensitive scenarios
Leverage	Policy dependent	Broader range may be available	Can vary materially
Loan term	Often structured around project stage	Project dependent	Shorter terms are common
Exit focus	Strong	Strong	Often central to credit assessment

These are broad market patterns, not fixed rules. Individual lender policies can differ.

For projects involving an income-producing asset, acquisition or refinance outside a pure construction facility, commercial lending may form part of the wider funding assessment.

Test the facility against the project

A useful comparison asks:

How much debt does the project require?
How much equity can the developer contribute?
What conditions must be met before settlement?
What conditions apply before the first construction draw?
How will interest be funded?
What happens if construction takes longer than forecast?
What is the total facility cost under the expected timetable?
What would the cost become after a delay?
Can the facility be extended?
Is the proposed exit realistic under current lender policy?

This approach makes property development finance pathways easier to compare on commercial terms rather than on one headline number.

From assessment to settlement

Blue Crane Capital works across bank, second-tier, non-bank and private lender markets. Its service scope includes commercial, construction and development finance, with the finance process managed from initial assessment through to settlement.

For a development scenario, an initial review can cover the site, project stage, borrower structure, current debt, feasibility, equity, builder, presales, funding requirement, settlement deadline and proposed exit.

Borrowers who want to see examples of previously published finance scenarios can review the Blue Crane Capital case studies.

That information can then be used to assess lender appetite and compare the available funding pathways.

If you have a live project, an approaching settlement deadline or an existing facility that requires refinance, Review Your Lending Options with Blue Crane Capital.

FAQs: timing, cost, exits and documentation

How long does property development finance take to arrange?

There is no standard timeframe. Timing can depend on lender type, valuation, feasibility, quantity surveyor review, credit approval, legal documentation and outstanding project information.

A complete information pack can help the assessment progress more efficiently. Developers with a fixed settlement deadline should raise timing at the start of the scenario review.

Is non-bank development finance more expensive than bank finance?

It can be. Non-bank facilities may carry a higher interest margin or different fees in return for credit settings that can fit a wider range of projects.

The better comparison is the total cost and commercial structure. A lower rate can lose value if the facility requires significantly more equity, creates timing issues or does not match the project stage.

When can private credit make sense for a development?

Private credit may be assessed where the transaction is time-sensitive, outside bank policy, partly completed or requires a funding structure that mainstream lenders are not offering.

A clear exit is central. The developer should know how the facility is expected to be repaid and what happens if that exit takes longer than planned.

What documents can a development lender request?

The lender may request:

project feasibility
development approvals
valuation
building contract
cost plan
quantity surveyor reports
presale schedule
company and trust information
borrower financial statements
assets and liabilities
project experience
evidence of equity
current loan statements
proposed exit strategy.

The exact list changes with the lender, project stage and facility structure.

ASIC publishes Responsible lending guidance covering credit activities that fall within the National Credit Act. The regulatory position can depend on the borrower, loan purpose and facility, so the applicable obligations should be checked for the individual transaction.

Can private credit or non-bank finance be refinanced into a bank later?

A refinance may be possible once the project reaches a stage that fits bank policy, such as completion, stabilisation or sufficient sales.

The future refinance should form part of the original assessment. Approval at that later point will depend on the property, borrower, valuation, debt level, market conditions and lender policy at the time.

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.

Property Development Finance: Bank, Non-Bank and Private Credit Pathways