Private Funding Australia – Property Development & Construction

Flexible Funding When Traditional Lending May Not Fit

Private Funding Australia may provide alternative funding options for eligible property development, construction and property-related transactions where traditional lending may not suit the project’s structure or timeframe.

At BISDA Finance, we help property developers, builders, investors and property owners explore private funding solutions based on their project, security, funding requirements and circumstances.

Whether you’re purchasing a development site, starting construction, completing an existing project, bridging a funding gap or refinancing existing debt, we’ll help you explore available funding options.

Property development and construction projects don’t always fit within the lending criteria or timeframes of traditional banks.

At BISDA Finance, we help property developers, builders, investors and property owners explore private funding solutions for development, construction and other property-related opportunities.

Whether you’re purchasing a development site, starting construction, completing an existing project, bridging a funding gap or refinancing existing debt, we’ll help you explore funding options based on your project and circumstances.

Have a project that needs funding?

DISCUSS YOUR PROJECT

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What Is Private Funding Australia?

Private funding is finance provided by private lenders rather than traditional banks.

Private lenders may assess transactions differently from traditional lenders, with consideration given to factors such as:

• The property or development
• Security available
• Loan amount required
• Current property value
• Development costs
• Project experience
• Proposed loan term
• Borrower circumstances
• Repayment or exit strategy

Every private lender has different lending criteria, so loan amounts, interest rates, fees, security requirements and terms can vary considerably.

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What Can Private Funding Be Used For?

Depending on the project, lender and borrower circumstances, private funding may be available for:

Property Development

Funding for eligible residential, commercial and other property development projects.

Construction Finance

Funding to assist with eligible construction and development costs.

Land & Development Site Acquisition

Finance to help acquire land or property intended for development.

Project Completion Funding

Additional funding for developments that require further capital to reach completion.

Bridging Finance

Short-term finance designed to bridge a funding gap between transactions or other funding events.

Development Debt Refinancing

Refinancing an existing development or property loan where appropriate.

Residual Stock Funding

Funding may be available against eligible completed but unsold properties within a development, subject to lender criteria.

Property-Backed Business Funding

Certain private lenders may consider eligible business funding where suitable property security is available.

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Who May Consider Private Funding?

Property Developers

Private funding may assist with site acquisition, construction, project completion, bridging requirements or refinancing existing development debt.

Builders

Builders and construction businesses may require funding for eligible projects, construction requirements or funding gaps.

Property Investors

Investors may consider private funding where a property opportunity requires a different funding structure or timeframe from conventional lending.

Business Owners

Eligible business owners with suitable property security may have private funding options available for certain business purposes.

Property Owners

Property owners with available equity may have funding options depending on the property, security, purpose and lender requirements.

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Why Consider Private Funding?

Private funding may be worth exploring when:

• Settlement is time-sensitive
• Traditional bank finance doesn’t suit the transaction
• A development opportunity has a limited timeframe
• Construction needs to commence or continue
• Additional capital is required to complete a project
• An existing facility is approaching maturity
• Short-term bridging finance is required
• Existing development debt needs refinancing
• The transaction or ownership structure is more complex
• A clear repayment or exit strategy is available

Private funding is generally about finding a funding structure that suits the transaction, rather than simply finding another loan.

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How Does Private Funding Australia Work?

1. Tell Us About Your Project

We start by understanding:

• What you’re developing or purchasing
• Where the property is located
• How much funding you require
• Your timeframe
• Current project status
• Available security
• Your proposed exit strategy

2. We Review the Transaction

Depending on the project, relevant information may include:

• Purchase price
• Current property value
• Existing debt
• Development approvals
• Plans and permits
• Construction budget
• Building contract
• Project feasibility
• Expected completed value
• Builder/developer experience
• Proposed loan term
• Repayment strategy

3. Explore Funding Options

Based on the information provided, we can explore private lending options that may suit the transaction.

4. Indicative Terms

Where a lender is interested, indicative terms may outline the proposed:

• Loan amount
• Interest rate
• Loan term
• Fees
• Security
• LVR
• Conditions

Indicative terms are generally subject to valuation, due diligence, lender assessment and formal approval.

5. Valuation & Due Diligence

The lender may require an independent valuation and additional information regarding the property, borrower and project.

Development and construction transactions may require additional reports and documentation.

6. Formal Approval & Documentation

If the lender approves the transaction, formal loan and security documents are prepared.

Independent legal advice may also be required.

7. Settlement & Funding

Once lender requirements and documentation have been completed, the facility can proceed to settlement.

For development and construction facilities, funding may be released progressively in accordance with the agreed structure and construction milestones.

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What Is an Exit Strategy?

An exit strategy explains how you intend to repay the private loan.

This can be particularly important because many private funding facilities are designed as short-term finance.

Common exit strategies may include:

• Sale of the completed development
• Sale of another property
• Refinancing to a bank or another lender
• Refinancing after construction is completed
• Repayment from an agreed property or business transaction

A realistic and clearly supported exit strategy can be an important part of a private lender’s assessment.

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Private Funding vs Bank Finance

Private funding and traditional bank finance serve different purposes.

Traditional Bank Finance

May be suitable where the borrower and project meet the bank’s lending criteria and required timeframe.

Private Funding

May offer greater flexibility for certain property transactions, particularly where timing, project structure or complexity makes conventional finance less suitable.

However, private finance can involve higher interest rates, establishment fees, legal costs and other charges compared with conventional lending.

That’s why the total cost, loan term, security requirements and exit strategy should be carefully considered before proceeding.

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What Security Is Required?

Private funding is commonly secured against real property.

Depending on the lender and transaction, acceptable security may include eligible:

• Residential property
• Commercial property
• Industrial property
• Development sites
• Land
• Other property assets

The amount a lender may consider can depend on the property’s value, existing debt, project structure and the lender’s acceptable Loan-to-Value Ratio (LVR).

For development projects, lenders may also consider factors such as current value, construction costs and estimated completed value.

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What Documents May Be Required?

Being prepared can help make the assessment process more efficient.

Depending on the transaction, you may be asked for:

• Identification
• Company or trust details
• Property details
• Contract of sale
• Existing loan statements
• Development approvals
• Plans and permits
• Building contract
• Construction budget
• Development feasibility
• Quantity surveyor reports
• Valuation information
• Pre-sales information, where applicable
• Existing debt information
• Builder/developer experience
• Project timeline
• Evidence supporting the proposed exit strategy

Requirements vary depending on the lender and transaction.

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Important Things to Consider

Private funding isn’t automatically suitable for every project.

Before proceeding, make sure you understand:

• Interest rate
• Establishment and lender fees
• Brokerage or advisory fees, where applicable
• Valuation costs
• Legal costs
• Loan term
• Default interest and fees
• Security requirements
• Repayment obligations
• Construction drawdown conditions
• Early repayment conditions
• Risks associated with project delays
• What happens if your exit strategy doesn’t occur as planned

Appropriate independent legal, financial and tax advice should be considered where required.

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Why BISDA Finance?

Private development finance can involve much more than completing a standard loan application.

At BISDA Finance, we take the time to understand your:

Project. Funding Requirement. Timeframe. Security. Exit Strategy.

We then help you explore available private funding options and navigate the process from the initial discussion through to settlement.

Clear Communication

Understand the proposed funding structure and important requirements.

Project-Focused Approach

We look at the transaction, property, funding requirement and proposed exit.

Private Lending Options

Explore available options for eligible property development and construction transactions.

Support Through the Process

From the initial funding enquiry through lender assessment, documentation and settlement.

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Have a Development or Construction Project?

Whether you’re acquiring a site, commencing construction, completing an existing project, bridging a funding gap or refinancing development debt, talk to BISDA Finance about your funding requirements.

Tell us about your project, funding amount and timeframe.

DISCUSS YOUR PROJECT

Private funding is subject to lender assessment, eligibility, satisfactory security, valuation, due diligence, fees and applicable terms and conditions. Interest rates, fees and lending criteria vary between lenders. Information provided is general in nature and does not take into account your individual objectives, financial situation or needs. Consider obtaining appropriate independent legal, financial and tax advice before entering into a finance arrangement.

Property developers should also consider relevant planning, building, taxation and regulatory requirements. Australian Government information for businesses is available through business.gov.au.