Every lender has a different appetite for risk and a different idea of what a “good project” looks like. If a development is taken to the wrong lender, it may could be declined.
This is why choosing the right lender early can make a huge difference.
Not Every Lender Funds Every Deal.
Think of lenders like different specialists.
Some prefer:
Small townhouse developments
Experienced developers
Projects with strong pre-sales
Lower leverage (lower LVR)
Others focus on:
First-time developers
Projects without pre-sales
Land refinances
Higher leverage development funding
If a deal doesn’t fit a lender’s criteria, the answer will almost always be no.
Why the Wrong Lender Can Slow a Project Down.
Time is critical in property development.
There may be:
Land settlement deadlines
Contractors ready to begin
Holding costs increasing each month
If a project is sent to lenders that will never approve it, developers can lose valuable time while searching for alternatives.
This is one reason why development finance requires a more strategic approach than standard home lending.
How a Specialist Finance Broker Helps.
Because each lender has different criteria, navigating the development finance landscape can be difficult without experience.
A specialist property development finance broker understands:
Which lenders fund certain types of projects
What each lender’s risk appetite looks like
How to structure deals to meet lending requirements
How to present a project properly to lenders
Instead of approaching multiple lenders and hoping one approves the deal, a broker can identify which lenders are most likely to support the project from the start.
They also help prepare the information lenders want to see, such as:
Feasibility analysis
Construction costs and reports
Development timeline
Exit strategy
Presenting a project clearly and professionally can significantly improve the chances of approval.
Property Development Finance Is Strategic.
Many successful developers do not use the same lender strategy on every project.
Some projects suit a main bank from the beginning. Others may need a non-bank lender because of leverage, timing, pre-sales, or structure. In some cases, a developer may start with a non-bank lender and look to refinance to a bank later once the project is completed or the risk profile improves.
That is why property development finance is less about finding one “best” lender, and more about finding the right lender for that stage and structure of the deal.