Background
The client is an experienced property owner and developer with a focus on delivering high quality residential projects. With a strong understanding of construction and delivery, they were actively progressing a luxury single dwelling residence in Perth when funding constraints began to impact execution.
Project Overview
The project involved the construction of a high-end residential home within a premium Perth market. Positioned as a bespoke luxury residence, the build was already underway at the time of funding restructure.
As construction progressed, it became clear that the existing funding arrangement was no longer aligned with the realities of an active build. The developer required a refinance solution that could both stabilise the current position and provide a clear path through to completion.
Key Metrics
Loan Amount: $1,146,000
Loan Term: 12 months
Facility Type: Capped interest construction facility
Timing: Mid construction refinance
The Challenge
The primary challenge centred on a misalignment between the existing facility and the requirements of a live construction project.
The original lender structure lacked the flexibility needed to support ongoing build progression. Drawdowns were not aligned with construction milestones, and administrative processes were slowing site momentum at a critical stage of delivery.
At the same time, the client needed to repay the existing lender, account for costs already incurred, and secure sufficient funding to complete the project without diluting their equity position.
This required a solution that could recognise value already created on site while resetting the funding structure to support efficient completion.
DFP’s Strategic Solution
DFP structured a capped interest construction facility specifically designed to align with the remaining build programme.
The new facility was tailored to the existing building contract and construction timeline, ensuring drawdowns were aligned with actual delivery milestones rather than rigid lender processes.
Importantly, the structure allowed for the full payout of the existing facility while recognising construction costs already incurred. This ensured the developer’s equity position was preserved, rather than reset or eroded through the refinance.
The facility also provided the remaining funds required to complete construction, creating a clear and controlled pathway through to project delivery, while improving cost certainty across the term.
Results and Benefits
The refinance repositioned the project onto a funding structure that matched how the development was being delivered.
With a purpose-built construction facility in place, the developer was able to continue building with confidence, supported by a drawdown process aligned to real construction milestones.
The funding solution removed friction from the delivery process, improved cash flow timing, and secured a clear path to completion without compromising the developer’s existing equity.
Ultimately, the project regained momentum, with funding certainty restored and execution risk significantly reduced.
Conclusion and Advice
Refinancing mid construction requires more than simply replacing one facility with another. It requires a clear understanding of how value has already been created, and how the remaining stages of the project will be delivered.
This case highlights the importance of aligning funding structure with construction reality. When the right facility is in place, developers can maintain momentum, preserve equity, and complete projects with greater control and certainty.
What This Means for Developers
• Mid construction refinance can reset a funding structure when existing facilities no longer support project delivery
• Funding should align with real construction milestones to maintain site momentum and cash flow
• Value already created during construction can often be recognised and preserved through the right refinance strategy
• Early restructuring can reduce execution risk and provide greater certainty through to project completion
Whatever the size of your development plan, DFP have a wealth of experience and strong relationships to help you succeed. Contact us to explore your tailored finance options.
