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Property development is one of the most capital-intensive undertakings a business can pursue. Whether you are looking to fund a residential subdivision, a multi-unit apartment block, a mixed-use commercial project, or a staged land release, securing the right development finance from the outset can determine whether a project succeeds or stalls. At Bannister Financial Services, we work with property developers across Greater Brisbane and Australia-wide to structure development loans that align with project timelines, cost structures, and exit strategies.
What Development Finance Covers
Development finance is a specialised form of property development finance designed to fund the construction and completion of a project rather than simply the purchase of an asset. Unlike a standard investment loan or commercial property loan, a development loan is typically drawn down in stages as construction milestones are reached. This means the loan amount grows progressively, and interest is generally charged only on funds drawn, which helps manage project cashflow during the build phase.
Development finance can be used across a wide range of project types, including land acquisition finance, subdivision finance, presale finance, mezzanine finance, and JV finance arrangements. Each of these structures serves a different purpose within the development funding lifecycle, and Bannister Financial Services has the experience to identify which combination of facilities best suits your specific project.
Development LVR, Deposits, and Equity
Lenders assess development loan applications differently from standard property loans. The development LVR, which is the loan to value ratio applied to the completed project value or the total development cost, is a central consideration. Most lenders will require a development deposit or meaningful development equity contribution from the borrower before they will commit to funding. The level of equity required varies depending on the lender, the project type, the loan amount, and the strength of the development feasibility.
Bannister Financial Services helps clients understand what lenders are looking for before an application is submitted. This includes reviewing project documentation, assessing the development feasibility and project cashflow projections, and ensuring that business financials are presented in a way that supports the application. A well-prepared submission significantly improves the outcome when dealing with banks and lenders across Australia.
Interest Rates and Loan Structures
Development interest rates are typically higher than standard residential or commercial lending rates, reflecting the increased complexity and risk profile of construction projects. Depending on the lender and the structure of the facility, rates may be offered on a variable interest rate or fixed interest rate basis. Bannister Financial Services works with a broad panel of banks and lenders across Australia to access loan options that suit the scale and nature of each project, whether that is a small residential subdivision or a large-scale staged development.
For projects that require additional funding beyond what a senior lender will provide, mezzanine finance or JV finance may be appropriate. These structures sit behind the first mortgage and can help bridge the gap between the senior development loan and the developer's available equity. Understanding where a second mortgage or mezzanine layer fits within the overall capital stack is something Bannister Financial Services assists clients with as part of the broader structuring conversation.
Development Approval and Project Readiness
Lenders will generally require a development application to be approved, or at minimum well advanced, before they will commit to funding. DA approval and council approval are key milestones that affect both the timing and the terms of a development loan. Bannister Financial Services works with developers at various stages of the development timeline, from early-stage land acquisition through to presale finance and development exit strategy planning.
Cost overruns are one of the most common risks in property development, and lenders are acutely aware of this. Detailed project costs and project documentation are essential to demonstrating that the development is viable and that contingencies have been properly accounted for. Bannister Financial Services assists clients in preparing the financial case for their project, drawing on decades of banking and finance experience to present development projects in the strongest possible light.
Why Work with Bannister Financial Services
Bannister Financial Services brings genuine depth of experience to property development finance. Our team understands the complexity of development project finance from both sides of the lending equation, having worked within banking institutions before moving into broking. This means we understand what lenders need to see, how they assess risk, and how to structure a submission that addresses their key concerns.
We work with developers who are looking to fund property development projects of varying scale and complexity, from first-time developers to experienced operators with multiple projects running simultaneously. Whether you are seeking to complete a development, realise your vision for a site, or achieve property development success on a project that has stalled at the funding stage, Bannister Financial Services has the relationships and the knowledge to help you access the right developer finance. Explore our commercial property loans and investment loans pages to understand the broader range of property finance solutions we offer.