Property Development Loans

HCP provides specialist non-bank funding for property development projects. We work alongside developers to structure debt and equity solutions for all stages of the project life cycle, ranging from site acquisitions right through to fully developed projects.

How do loans for property development work?

Property development funding is designed to help cover the costs of building more than one property on one title. This could be a residential property development including townhouses, land subdivisions and units or commercial in nature such as industrial and retail developments. Finance is typically provided as a short-term loan based on your site’s current value, the build costs and the gross development value.

Finance for property developers has several different features to a normal home loan, including interest capitalisation and staged payments. Interest capitalisation allows the borrower to have the interest added to their total loan amount with no payments made until completion. Property development loans are also paid to the borrower as each stage of the project is completed rather than a lump sum upfront. These stages are typically the deposit, base, frame, lock up, fixing, and completion.

Different types of property development lending are available for each different stage of the project. This can typically be broken up into:

Site loans to cover the acquisition costs of the land, development application and other pre-construction costs
Construction loans to cover the “hard costs” directly related to the actual building of the project, such as equipment, materials and labour
Mezzanine finance or preferred equity to cover any funding shortfalls, such as “soft costs” including permits, plans and inspections
Residual stock or reverse equity loans if the developer intends to retain part or all of the completed project as a long term investment

We have worked with Dan Holden to finance our projects since 2009, we have always found him to be reliable and has always delivered. We have completed multiple projects under his funding guidance. Dan adds much more than just funding to our group. Even through the credit-constrained times, Dan always ensured we had the right loan to suit our requirements.

Ron Bakir – Homecorp

Over 30 projects funded with HCP

HCP’s property development loan products

Site Loans

A straight-forward solution to get your site settled or refinanced.

Key features

Loan amount

$1M – $15M

Loan term

6 – 12 months

LVR

65% – 70%

Security

1st Mortgage

Locations

Metro. Regional considered*

Fees and charges

Interest rate

from 9.5% pa

Establishment fee

from 1.5%

Monthly admin fee

from 0.04% pcm

Senior Debt Construction Loans

A "keep it simple" approach to funding your project.

Key features

Loan amount

$1M – $15M

Loan term

6 – 18 months

LVR

Up to 65% or 73% with stretch product

Security

1st Mortgage

Locations

Metro. Regional considered*

Fees and charges

Interest rate

from 9.5% pa

Establishment fee

from 1.75%

Junior Debt Construction Loans

A top-up piece between senior debt and borrower equity.

Key features

Loan amount

$1M – $10M

Loan term

6 – 18 months

LVR

Up to 75%

Security

2nd Mortgage

Locations

Metro. Regional considered*

Fees and charges

Interest rate

from 18% pa

Establishment fee

from 2.75%

Residual Stock Loans

Enables you to refinance your existing facility and affect an orderly sell down ensuring value and the resulting return on investment are protected.

Key features

Loan amount

$1M – $15M

Loan term

6 – 12 months

LVR

Up to 70%

Locations

Metro. Regional considered*

Fees and charges

Interest rate

from 9.5% pa

Establishment fee

from 1.75%

Preferred Equity Loans

Deal rich, cash poor? HCP can partner with you to help deliver your projects and enhance your return.

Key features

Loan amount

$1M – $10M

Loan term

6 – 18 months

LVR

Up to 97%

Security

2nd Mortgage or Preferred Equity

Locations

Metro. Regional considered*

Fees and charges

Coupon

from 24% pa or negotiated profit share

Establishment fee

from 2%

Monthly admin fee

from 0.2% pcm

Reverse Equity Loans

Have a project where construction funding is in place, the builder has commenced and you would like to secure your next site / project. HCP can help.

Key features

Loan amount

$1M – $10M

Loan term

12 – 18 months

LVR

Up to 75%

Security

2nd Mortgage or Preferred Equity

Locations

Metro. Regional considered*

Fees and charges

Interest rate (2nd Mortgage)

from 15% pa for low risk / low gearing

Interest rate (Preferred Equity)

from 23–26% pa

Establishment fee

from 2%

Monthly admin fee

from 0.2% pcm

Need to secure commercial property finance for a current or upcoming project?

HCP’s ExpressFUND is a stream-lined process providing fast approvals and funding solutions. Submit your scenario via our ExpressFUND form.

Submit a Scenario

Why choose HCP for commercial property development loans?

As an experienced property development finance lender, HoldenCAPITAL Partners recognises that every project is different and therefore requires a unique solution for property development funding. We work alongside developers to help them grow their business and develop a pipeline of projects with our flexible terms, competitive pricing and fast approvals for private development finance.

HCP typically works with privately-owned entrepreneurial-style developers who have two to three projects on the go at any one time across their portfolio. That ranges from experienced property developers doing 400 to 500 house and land packages a year down to boutique owner-builders. We provide financing for development projects such as townhouses, units, land subdivisions, and mid to high-end houses.

Many of our clients have traditionally sourced funding from major banks, but are now turning to private lender development finance. Banks are risk averse and require a certain level of pre-sales with property development loans. Funds from pre-sales are held on trust and can’t be used to help finance the project. Banks may require up to 60% of the project to be pre-sold before providing finance for property developers.

Rapidly changing market conditions can have a dramatic effect on project profitability. HCP offers minimal or no presales development finance from a private lender to help our clients get their projects underway without the potential costly delays associated with bank lending. Our team can get a quality surveyors report, build contract, project feasibility, and tie it all together and settle in two weeks.

HCP’s solutions for private development finance give our clients more flexibility with how they utilise their capital. We can provide everything from site acquisition and progressively drawn construction loans to mezzanine finance and residual stock funding. The terms of our property development loans can be tailored to meet the needs of the developer which allows them to do multiple projects at once.

HCP can assist when you need property development funding in Brisbane, Sydney, Melbourne or anywhere throughout Australia. Since 2017, our team has completed loan facilities exceeding $150 million across some 40+ projects. Our funding capacity has grown and we are now providing property development loans up to $15 million. Submit your scenario today to get express funding from HoldenCAPITAL Partners.

Need more information? Download our lending guide.