Development finance

What does development finance cover?

• Site acquisition for a project the sponsor is positioned to deliver.
• DA-hold: funding the carrying cost of a site through planning approval.
• Lead-in to construction: pre-construction expenditure (design, approvals, early contractor engagement) ahead of the bank construction tranche.
• Selective residual stock and completion facilities on stronger files.

What can Archer Wealth consider on a development file?

The branded product is Archer LandX. Files are written nationally with the largest concentration in SEQ (Brisbane, Gold Coast, Sunshine Coast), Western Sydney and the growth corridors of Melbourne. Sponsors with documented delivery histories and credible presale pipelines progress furthest.

How is a development loan structured?

Security

Registered first mortgage on the site, GSA over the borrowing entity, and personal guarantees from the sponsor(s). Additional security is sometimes taken where the file calls for it.

LVC and LVR

Loan-to-Cost (LVC) caps how much of total project cost the loan funds; Loan-to-Value (LVR) caps the loan against the site or future value. Both metrics apply. See Loan-to-Cost explained.

Term

Sized to the milestone the exit depends on (DA grant, presale threshold, bank takeout). Buffer is built in for slippage.

Drawdown

Initial drawdown at settlement covers the acquisition or refinance; subsequent tranches are released against documented milestones certified by an independent quantity surveyor or equivalent.

What documents does a development scenario need?

• Sponsor CV with comparable delivery history.
• Site details, contract of sale, current valuation if available.
• Project feasibility and cost plan (preferably QS-prepared).
• Planning status and approval pathway.
• Presale evidence where the file relies on presales for the exit.
• Construction takeout pre-approval or letter of interest from the bank for the takeout.

What are the key risks?

Development files carry concentrated execution risk: cost overruns, programme delay, presale rescission, planning variation, and refinance risk at the bank takeout. The credit team underwrites each of these explicitly at submission, and structures the loan with milestone-based drawdown rather than releasing capital up front. Property-secured lending carries the risk of loss of the security on default.

Frequently asked

• What is private development finance?
  Private development finance is short to mid-dated lending for property development. Typical uses: acquiring a site, holding a site through planning approval, funding pre-construction works, or bridging into a major-bank construction facility. The lender takes a registered mortgage, sizes the loan to LVR and LVC envelopes, and stress-tests the exit.
• Does Archer Wealth fund construction?
  Archer LandX, the branded product, covers site acquisition, DA-hold and the lead-in to construction tranches. Full vertical construction debt is provided selectively where sponsor, design and presales support it; otherwise the standard exit is a refinance into a major-bank construction takeout.
• What is LVC and why does it matter?
  Loan-to-Cost (LVC) is the loan amount divided by total project cost. On development files, LVC is often the binding metric, not LVR, because the exit depends on the project actually being delivered to plan. Standard envelopes vary by project type.
• What sponsor profile is needed?
  An experienced developer with a demonstrable delivery track record on comparable projects. First-time developers can be supported where the structure is right (suitable LVC, presales locked, experienced builder, capable project manager), but the bar is higher.
• How are presales treated?
  Presales are core to development credit. The lender looks at the quality of the contracts (real deposits, low rescission risk, qualified buyers), the percentage of stock under contract, and the gap to the takeout LVR. Soft presales (unqualified, low deposit) are treated cautiously.
• What is the typical exit on a development loan?
  Refinance into a bank construction facility once the project reaches sufficient presale or DA milestone, sale of completed stock, or sale of the site with planning approval. Each exit is documented and stress-tested at entry.
• Can the lender fund the land and the build?
  Selectively. Site-only is the most common Archer Wealth structure with a planned refinance to bank construction debt. Combined site-plus-build facilities are written on stronger files with proven sponsors and credible presale support.
• What about residual stock or completion finance?
  Residual-stock and completion finance, holding completed but unsold stock or finishing a stalled project, are written file-by-file where the underlying security and exit make sense. These are specialist files with their own credit lens.