Development Finance – Reliiance Commercial

DEVELOPMENT

FINANCE

Finance solutions for residential and commercial property developers

DEVELOPMENT
FINANCE

Are you a property developer? Finding the right source for development finance is not easy. An average broking company may not have the experience to fully understand the intricacies involved in property development finance. Development finance can be influenced by factors such as the nature of the project, feasibility and developer’s experience among others.

Whether your next property development project is a multi-dwelling apartment complex, land banking, land sub-division or a residential tower or shopping complex, at Reliiance Commercial we are happy to assist you obtain finance for your development project.

By definition, property development finance is a loan that can help you fund development of more than one dwelling on one title. Most banks and other lenders generally divide property development into two parts, and both can have very different approval processes, fees and charges, interest rates and risk assessments.

Residential: Most banks and lenders define residential property development as smaller-scale development, often up to four different dwelling. This kind of mortgage can have standard fees and charges and is the less risky of the two. In recent times, we have seen a surge in development of 3-4 houses, units or townhouses.
Commercial: If your property development project involves more than four or five dwellings, banks and lenders are likely to consider it as a commercial property development. This can be anything from a skyscraper to a series of commercial properties or land sub-division.

So we see that generally, banks differentiate commercial development from residential by the number of units proposed to be built with the loan. The application process for a commercial loan is more detailed than a residential loan. Some of the things you may have to produce include

A sound business plan for the project
The track record of your property development business
Status of any previous loans the business has repaid or has to repay

Loan Terms

When it comes to the terms of property development loan, there are differences between lenders and property types. Your track record will play a part in getting favorable terms along with the size and scale of the project.

A key variable in development finance is the loan-to-value ratio (LVR). If your LVR is 70%, it means the bank will lend 70% of the property’s market value, leaving you with providing the remaining 30%. Seventy percent is the standard for large commercial projects.

At Reliiance Commercial, we have the requisite experience in handling loans for property development with several clients in the property development sector. We’d be happy to have a chat with you to understand your project and explore your options.

Call Reliiance Commercial on 02 9893 7881 for an obligation-free meeting