Development Finance for Small Projects

Development finance funds the construction of a project designed to be sold or held, such as a duplex, townhouses, a small subdivision or a handful of units. Where a residential construction loan focuses mainly on your income, development finance looks closely at the project itself: the land value, the build cost, the expected sale values of the finished dwellings, and the margin in between.

Smaller projects, like a duplex or two-lot subdivision, can sometimes be funded with residential construction lending, which is usually cheaper. Larger projects move into commercial development lending, where lenders may require presales, a higher contribution of your own funds, and a detailed feasibility study. Where that line falls depends on the lender, the number of dwellings and whether you plan to sell or keep them.

Funding typically covers a portion of the land and construction costs, released in stages like a construction loan. Interest may be capitalised, meaning added to the loan rather than paid monthly, which helps cash flow during the build. The loan is then repaid from sales or refinanced into long-term investment loans if you are keeping some or all of the dwellings.

We work with your accountant, builder and town planner to present the project in the way lenders want to see it. That means a realistic feasibility, a clear exit strategy and a structure that makes sense for tax and risk.