Property Development Finance


Property development finance is the lifeblood of turning visions into reality. At BEDROCK Funding, we specialise in providing tailored financial solutions for property development projects of all sizes. Whether you’re embarking on a residential, commercial, or mixed-use development, our team of experts will work closely with you to secure the funding needed to make it happen. With our wealth of experience and dedication to client satisfaction, we streamline the funding process, allowing you to focus on bringing your project to fruition.

When assessing a new property development project, we first identify the client’s key considerations and goals to provide appropriate funding. Based on these, we explore various property development finance solutions and match you with the right lenders, whether traditional banks or private commercial construction lenders with a special interest in your property.

Property Development Finance Services

Bank Funded Property Development Loans

Traditionally, major banks handle property development loans.

These banks are inherently sponsor-centric, operating on the philosophy that a reliable sponsor is likely to select good projects and deliver positive outcomes.

Therefore, a bank will first evaluate their comfort level with the sponsor before considering the project and location.

Non-Bank Property Development Finance

Most banks and mainstream financial institutions have stringent rules and requirements for loan serviceability, borrower experience, pre-sales, and Loan to Value Ratios (LVR). Typically, they require the borrower’s up-to-date financials, at least two successfully completed previous projects, 100% debt cover in pre-sales, and a maximum 65% Loan to Value limit.

However, many private lenders and mortgage trusts (referred to as Non-Banks) are less stringent. These Non-Banks may require minimal to no pre-sales, depending on the project size, and offer up to a 75% Loan to Value limit and up to 90% of the Total Development Cost.

Non-Banks are generally more project-focused, whereas banks are more sponsor-focused.

Mezzanine Finance

Mezzanine finance is an additional subordinated loan (behind the senior debt provider) which is generally secured by a second mortgage over the property. Mezzanine finance is used when the senior debt (i.e. the primary loan secured by a first mortgage) plus the developer’s equity is not enough to cover the total development cost of the project.

Mezzanine finance can also be used to reduce a developer’s equity to allow them to use their equity for other projects and “in doing so” diversifying their risk.  

Mezzanine finance comes at a higher cost, but reducing the developer’s equity contribution will increase the return on equity considerably.

Stretch Senior Finance

Stretch Senior Finance is a funding option that combines senior and junior debt into a single loan to achieve a higher LVR than typically available from the major banks and other mainstream lenders.  

Stretch Senior Finance can provide funding for up to 90% of the total development cost and normally has reduced pre-sale requirements, and is therefore more expensive than traditional major bank funding.

Preferred Equity & Joint Ventures

Preferred Equity and Joint Ventures are alternatives to Mezzanine Finance and Stretch Senior financing to increase total project funding. These options are useful when senior debt (the primary loan secured by a first mortgage) and the developer’s equity are insufficient to cover the total development cost.

Unlike Mezzanine Finance, Preferred Equity is not secured by a second mortgage on the property, eliminating the need for a deed of subordination with senior lenders. This often makes banks more willing to approve senior debt when Preferred Equity is involved, rather than mezzanine finance.

The capital partner providing the Preferred Equity typically receives a fixed percentage of the profit upon project completion, sometimes coupled with a small interest component. Their investment and returns are prioritized over the developer’s equity but are subordinate to the senior debt provider.

Site Acquisition Finance

Site Acquisition Finance is financing to purchase the development site as well as to cover the associated development approval costs. We can provide financing for sites pre or post DA.  

In most cases, loan security is limited to the subject property and personal guarantee only. Interest can be capitalised for the loan period or serviced monthly.

Residual Stock Finance

In the property development industry, it is common for not all products to be sold and settled within three months of practical completion. Sometimes, the sales process takes longer for various reasons.

Most projects carry a significant portion of construction finance, which is typically repaid from sales proceeds at completion or within three months of completion and titling. This can pose a problem if there are insufficient settlements to meet the repayment deadline.


Bedrock Funding’s eight step process for development funding ensures you to feel empowered and are transparently communicated along the way.