Construction Development Finance
Construction Development Finance
Providence Finance Hub specialises in construction and development finance for builders, developers and investors across Australia. Whether you are building a single residential dwelling, developing a multi-unit site or funding a commercial construction project, we structure lending solutions that match your project timeline and exit strategy.
Development finance is fundamentally different from standard property lending. Drawdowns are staged against build progress, lender requirements are more complex, and the wrong structure can stall your project mid-build. With access to more than 50 lenders – including specialist non-bank construction lenders – we find the right fit for your project from the ground up.
What is Construction and Development Finance?
Construction and development finance is a specialised lending category designed for projects that do not yet exist as a completed asset. Unlike a standard purchase loan, funds are released progressively as each stage of construction is completed and certified – a process known as progress drawdowns.
Lenders assess these loans on the end value of the completed project (the Gross Realisation Value or GRV), your experience as a developer or builder, the feasibility of the project, and your exit strategy – whether that is sale, refinance or hold.
Construction finance applies to new residential home builds, duplex and townhouse developments, multi-unit residential developments, commercial and industrial construction, mixed-use developments, and land subdivision and titling.
The Construction Finance Process - What to Expect
Getting construction finance approved involves more steps than a standard home loan, but the process is straightforward when you work with an experienced broker. Here is what the journey typically looks like:
1. Initial assessment and pre-qualification
We review your project brief, site details, equity position, and development experience. We identify which lenders are a match and what loan structure makes sense for your project type and size.
2. Quantity surveyor and feasibility review
Most construction lenders require a quantity surveyor (QS) report confirming the build cost estimate and project feasibility. We can refer you to QS firms we work with regularly.
3. Loan application and credit approval
We prepare your application, including the building contract, council approvals, and project documentation. Specialist development lenders look at the project merits alongside your personal financials.
4. Progress drawdowns during construction
Once approved, funds are released in stages – typically slab, frame, lock-up, fit-out, and practical completion. Each drawdown is triggered by a builder or bank inspection confirming the stage is complete.
5. Completion and exit
At practical completion, you either sell the completed properties, refinance to a standard investment loan, or transition to a long-term hold strategy. We plan the exit structure from day one so there are no surprises.
Residential Construction Finance
For owner-occupiers building their own home, construction loans work differently from standard purchase loans. Rather than receiving the full loan amount upfront, funds are drawn progressively as each stage of the build is completed. This means you only pay interest on the amount drawn – not the full loan amount – which significantly reduces holding costs during construction.
Key features of residential construction loans include interest-only repayments during the construction period (typically 12 months), drawdowns matched to your builder’s progress payment schedule, and a fixed-price building contract required by most lenders. Owner-builder options are also available through select lenders.
We work with major banks and non-bank lenders to find a construction loan that fits your land and build budget, your chosen builder, and your long-term plan for the property.
Residential and Commercial Development Finance
For developers building two or more dwellings – or commercial and mixed-use projects – the lending landscape is dominated by specialist development lenders. Major banks have largely withdrawn from development finance below $5 million, making broker access to the non-bank market essential.
We regularly structure development finance for duplex and dual-occupancy projects, townhouse and villa developments (3 to 20 lots), apartment projects (from boutique 4-plex to 100+ units), commercial warehouse and office construction, industrial developments, and mixed-use ground-floor retail and upper-floor residential.
Development loan terms vary significantly between lenders – LVR against GRV, presale requirements, interest rate structures, and line fees. We compare the true cost of funding across lenders so you can make an informed decision before you commit.
Why Use a Broker for Construction Finance?
Construction and development finance is one of the most complex areas of commercial lending. Lender appetite changes constantly – a lender that funded a project six months ago may have tightened their criteria or pulled out of that loan size entirely. Without broker access to the full market, developers often waste weeks pursuing the wrong lenders.
Here is what you get when you work with Providence Finance Hub:
- Access to 50+ lenders including specialist non-bank development financiers
- A team with 20+ years of banking and finance experience in construction and commercial lending
- Loan structuring advice before you buy the site – not after
- Drawdown management support throughout the construction period
- Exit strategy planning built into the initial structure
- No obligation assessment to review your project
Whether you are a first-time developer or an experienced builder with multiple sites in progress, we match your project to the right lender and manage the process from start to finish. Learn more about our team.
Frequently Asked Questions
How much deposit do I need for a construction development loan?
Most residential construction loans require a minimum 5 to 10% deposit. Residential development loans (2+ dwellings) typically require 20 to 30% equity. Commercial construction generally requires 30 to 40% contribution. Some non-bank lenders will consider higher LVRs for experienced developers with presales in place.
Do I need council approval before applying for construction finance?
Yes – most lenders require a DA (Development Approval) or building permit before formal approval. Some lenders offer pre-DA funding or land banking facilities. We can advise on the right entry point based on your current project stage.
What is a progress drawdown?
A progress drawdown is a staged release of construction loan funds tied to specific build stages: slab/base, frame, lock-up, fit-out, and practical completion. Each drawdown requires an inspection confirming the stage is complete before funds are released to your builder.
Can I get construction finance if I am an owner-builder?
Yes, though the number of lenders who accept owner-builders is limited. You will need a valid owner-builder permit and relevant building experience. We work with lenders who specialise in owner-builder construction loans.
What is GRV and how does it affect my loan?
GRV stands for Gross Realisation Value – the estimated total value of your completed project. Development lenders typically lend up to 65 to 70% of GRV. Understanding your GRV before committing to a site determines the maximum funding you can access.
Get Your Construction Finance Assessment
Whether you are buying a site, finalising your DA, or ready to break ground, the earlier you engage a specialist broker, the better your outcome. Lender selection, loan structure, and presale requirements all need to be factored in before you commit to a site.
Providence Finance Hub provides obligation-free construction and development finance assessments across Australia. Our team brings more than 20 years of banking and finance experience to every project briefing. We are members of both MFAA and CAFBA (member 296331) and hold an Australian Credit Licence.
