Background
The client was an experienced property developer with a proven track record delivering residential developments across the Australian Capital Territory. With multiple successful projects completed, the developer was focused on progressing an existing residential development already under construction while maintaining sufficient liquidity to support ongoing delivery and future opportunities.
As construction advanced, the developer sought a funding solution that would maximise the equity available within the project while preserving financial flexibility throughout the remaining build program.
Project Overview
The project involved the continued construction of a residential development in the ACT.
As the development progressed through the construction phase, the developer required a construction facility that would support the remaining build program while optimising the equity available within the project. The funding solution needed to maintain project momentum, provide ongoing liquidity and position the development for successful completion.
Key Metrics
Loan Amount: $1.7 million
Location: Australian Capital Territory
Project Type: Residential Construction Finance
LVR Against Valuation: 75%
Loan to Cost: 80%
Presales: Nil
The Challenge
As construction progressed, the developer sought to maximise the equity available within the project while maintaining sufficient liquidity to complete the remaining works.
The existing funding structure did not fully recognise the progress already achieved on site, limiting the amount of capital available to support the next stage of construction. The challenge was to structure a facility that better reflected the project's current position while maintaining prudent lending parameters and supporting uninterrupted project delivery.
DFP's Strategic Solution
Development Finance Partners worked closely with its lender network to restructure the construction facility around the project's current stage of completion.
Leveraging strong lender relationships and a detailed understanding of construction finance, DFP negotiated a facility maintained at 75% LVR while arranging an updated valuation that accurately reflected construction works completed to date. This enabled the lender to recognise the project's progress and release an additional progress payment, improving the developer's available liquidity.
By proactively managing both the funding structure and valuation process, DFP unlocked additional equity within the project without requiring the developer to contribute significant additional capital. The tailored funding solution preserved construction momentum while maintaining an appropriate lending structure aligned with the project's ongoing delivery.
Results and Benefits
Development Finance Partners successfully structured a $1.7 million construction facility at 75% LVR and 80% LTC without requiring presales.
The revised funding structure improved the developer's available liquidity, reduced the need for additional equity and supported uninterrupted project delivery. By aligning the funding facility with the project's current stage of construction, DFP helped preserve capital that could be allocated towards future development opportunities.
More broadly, the transaction demonstrated how proactive funding reviews, strategic lender engagement and tailored construction finance solutions can improve funding outcomes throughout the development lifecycle.
Conclusion and Advice
Construction funding requirements often evolve as projects progress. Ensuring a funding structure continues to reflect the current stage of construction can improve liquidity, preserve equity and support uninterrupted project delivery.
For developers undertaking residential construction projects, proactive funding reviews and early engagement with an experienced development finance advisor can create greater flexibility throughout the construction lifecycle and position projects for stronger funding outcomes.
What This Means for Developers
- Construction progress can unlock additional funding opportunities
- Strategic funding reviews can improve project liquidity
- Strong lender relationships create greater funding flexibility
- Tailored construction finance supports uninterrupted delivery
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.
