The short answer
Commercial development loans fund the parts of a project that a construction lender won't, or won't fund quickly: site deposits and settlements, pre-construction costs, cost-to-complete shortfalls and residual stock after completion. BizLoansFast lends $20,000 to $5,000,000 secured by first mortgages, second mortgages or caveats over the site or other property, with same-day answers common and settlement usually within a few business days.
- Fills the gaps around a main construction facility, not just the build itself
- Secured over the site, completed stock or the developer's other property
- Residual stock loans give you time to sell rather than discount
- The exit is the sale of lots or a refinance, mapped before we lend
| Loan size | $20,000 to $5,000,000 |
|---|---|
| Security | First mortgage, second mortgage or caveat over residential or commercial property |
| Common uses | Site settlement, holding costs, cost overruns, residual stock, partner buyouts |
| Decision basis | Security value, cost to complete and a clear sale or refinance exit |
Commercial development loans are short-term, property-secured loans that keep a project moving when the main construction lender can’t or won’t act fast enough. They cover the stages either side of the build and the holes that open up during it: buying the site, carrying it through approvals, finishing when costs run over, and holding unsold stock after completion. BizLoansFast lends $20,000 to $5,000,000 on these deals, with same-day answers common.
Developers rarely come to us for the whole project. They come for the piece that’s stuck. Our job is to unstick it quickly and get out of the way once the project’s own exit arrives.
Where do commercial development loans fit in a project?
Commercial development loans fit wherever the project needs money on a date the senior lender can’t meet. Most development finance problems happen at the edges of the construction facility rather than in the middle of it. The table maps each stage to the usual funding and where fast secured money earns its keep.
| Project stage | Usual funding | Where fast money fits |
|---|---|---|
| Site acquisition | Deposit, then a land loan or cash | Deposit or settlement when the land lender is slow |
| Pre-construction | Developer’s equity | Consultants, approval costs, holding costs, rates and land tax |
| Construction | Senior construction facility | Equity top-ups the senior lender requires before the next draw |
| Completion gap | Developer’s equity | Cost overruns, variations, final claims |
| Post-completion | Sales or an investment loan | Residual stock loan while lots sell |
The Reserve Bank’s October 2025 Bulletin found construction was one of the main drivers of growth in fixed-term lending to small and medium businesses. Plenty of developers are borrowing. The ones who stay out of trouble are those who know where their gaps will be before they’re standing in one.
How does fast development finance work around a construction lender?
Fast development finance is secured where the construction lender isn’t, or behind them with their consent. There are three practical options:
- Security over other property. A loan secured over the developer’s home, an investment property or another site, leaving the project’s senior debt untouched. This is usually the fastest because no other lender is involved.
- Second mortgage over the project site. Sits behind the construction lender. Most senior lenders must consent first, and some won’t, so we ask early.
- Caveat. Used where time is short and the structure allows it, often over a property outside the project.
Where a second mortgage needs consent, we start that conversation the day you call. Waiting on another lender’s paperwork is the most common reason a development deal settles in two weeks instead of three days. If you’re simply waiting for a sale to complete, compare this page with our fast bridging loans.
What can pre-construction money pay for?
Pre-construction money pays for the costs that pile up before a construction lender will advance anything. The usual list:
- Architects, engineers, town planners and quantity surveyors.
- Council contributions and approval fees.
- Land tax, council rates and interest on the land loan while approvals run.
- Demolition, site remediation and early works.
- The deposit and settlement on a neighbouring lot that makes the project bigger or better.
Most construction lenders want to see the developer’s equity spent first, which is exactly why these costs drain cash. Releasing equity from a completed project, a home or another site keeps the new one moving without selling something at the wrong time.
How does construction to completion funding work when costs blow out?
Construction to completion funding covers the gap between what the senior lender will still advance and what it actually costs to finish. When costs rise, a construction lender typically stops drawing until the developer injects enough equity to restore the agreed cost-to-complete position. The builder isn’t paid, works slow, and the program slides.
To fund that gap quickly we look at:
- The quantity surveyor’s latest cost-to-complete report and how much is genuinely left to spend.
- The builder’s outstanding claims and variations, so the number we fund is the real number.
- The end value of the completed project against total debt, including ours.
- Other security available outside the project if the site itself is already fully geared.
Fund the true shortfall once. Borrowing just enough to get one more draw, then coming back a month later, costs more time and more fees than solving it properly the first time.
What is a residual stock loan?
A residual stock loan refinances the unsold lots or units of a completed project so the construction facility can be repaid and the developer can sell at a sensible pace. Construction lenders want out soon after completion. If half the units haven’t sold by then, the choice is often between discounting stock to clear it or refinancing what’s left.
A residual stock loan is secured over the completed, unsold stock. Each sale settles, a release fee or agreed amount is paid down, and the mortgage comes off that title. The loan shrinks as the stock sells.
Two things to build into the exit:
- GST withheld at settlement. The ATO requires buyers of new residential premises and potential residential land to withhold GST from the price and pay it to the ATO at settlement. Your net proceeds per sale are lower than the headline price, so the paydown schedule should be built on net figures.
- Selling costs and holding time. Agent fees, marketing, rates, strata levies and the loan cost itself all come out of the same pool.
Mixed-use and commercial projects work the same way, though commercial stock often sells or leases more slowly, so the term needs more room. Our business loan exit strategy guide walks through building a sell-down plan a lender will believe.
What does a lender look at on a development deal?
A fast lender on a development deal looks at four things: the security, the cost to complete, the exit and the developer. In practical terms, have these ready:
| What we need | Why it matters |
|---|---|
| Title details and existing debt on every property offered | Confirms equity and who must sign or consent |
| Development approval and plans | Shows what’s being built and that it can be |
| Quantity surveyor report or builder’s contract | Separates the real shortfall from the hoped-for one |
| Sales evidence, exchanged contracts or a refinance offer | Proves the exit is real |
| A short project history | Experience and track record shorten the conversation |
You don’t need a glossy feasibility pack. A clear email with the numbers and the plan is usually faster to assess than a fifty-page document. When you’re ready, send us the project details and an experienced lender will review the security and the exit.
How fast can development money land?
Development money can be approved the same day and usually settles within a few business days when the security is outside the project. Funds can land within 24 hours on the cleanest files. A second mortgage behind a construction lender takes longer because their consent is outside our control.
What speeds it up:
- Security that’s simple to assess, with recent nearby sales or an agent’s appraisal to hand if you have them.
- Senior lender consent requested on day one, not day five.
- Solicitors on both sides told the settlement date upfront.
- A quantity surveyor’s figure, not an estimate.
What slows it down: unclear ownership structures, unpaid rates or land tax on title, disputes with the builder, and a missing sales or refinance plan.
Illustrative example: carrying six townhouses to sale
Illustrative example: a developer completes six townhouses. Four sell off the plan and settle, paying down most of the construction loan. Two remain unsold, and the construction lender wants its remaining $1,200,000 repaid within three weeks.
The two completed townhouses are worth around $1,000,000 each. We provide a residual stock loan secured by first mortgages over both, repaying the construction lender on time. The developer lists the townhouses with a realistic campaign rather than discounting them in a rush. The first sells in three months and repays most of our loan after GST withheld at settlement and selling costs. The second sells two months later and clears the balance.
Without the refinance, the developer would have been negotiating with a lender who held all the leverage.
Get an answer today
When a development stalls, every week costs holding costs, builder goodwill and buyer confidence. Speak to someone who has lent through these situations before. There’s no credit check to make an enquiry, your details aren’t shopped around to other lenders, and you’ll get a straight answer quickly, yes or no, so you can make your next move.
Business purposes only. Give us accurate figures on the debt, the cost to complete and your sales so far, because an accurate first enquiry means an accurate first answer. Start your development loan enquiry, call 1300 852 150, see how we help property developers, or browse all our loan products. If the project’s done and you’re buying an income-producing building, our fast commercial loans page is the better starting point.
How it works, step by step
- Send the project snapshotSite address, stage of works, debt in place, the gap you need funded and the date it's due.
- Indicative answerWe look at the security, the cost to complete and the sale or refinance plan and give you a straight answer, often the same day.
- Property check and consentsWe assess the security ourselves, with no valuation needed, and where the project has a senior lender we start on their consent straight away.
- Settle and get back to buildingDocuments are signed, security is registered and funds are paid to the builder, the vendor or the outgoing lender.
Development loans: your questions answered
Do I need pre-sales for a development loan?
For the short-term gap funding we provide, pre-sales help but aren't always required. What matters more is whether the security covers the loan comfortably and whether the exit is believable. Exchanged contracts, an agent's sales evidence or a refinance offer for completed stock all strengthen the file. A project with no sales and no other security will be looked at more cautiously.
Can a development loan be used to buy out a joint venture partner?
Yes. Partner buyouts are a common use, particularly mid-project when one party wants out and the other needs to keep control of the site. We need the agreed buyout figure, the joint venture agreement and the plan to finish or sell. The loan is usually secured over the site and, if needed, other property owned by the remaining partner.
What happens if the finished project is worth less than expected?
A lower end value shrinks the equity available and can change how much can be lent against completed stock. The practical answers are adding another property as security, selling one or two lots first to reduce debt, or borrowing a smaller amount for a shorter period. Tell us your own sales evidence early so expectations line up from the start.
Will the builder be paid directly?
It depends on the purpose. For a cost-to-complete loan we can pay the builder's verified claim directly, which gives everyone confidence the money reaches the job. For site settlements or lender payouts, funds go to the vendor or the outgoing lender at settlement. Either way, you'll see exactly where every dollar goes on the settlement statement.
Can I borrow against a site that only has a development approval?
Yes. An approved site is often worth more than the same land without approval, and that uplift can support a loan for consultants, holding costs or a deposit on the next project. We assess the site ourselves as it stands with the approval in place, with no valuer to book, so have the approved plans and conditions ready to send.
Sources we checked
Written by the BizLoansFast lending team · Updated 2026-10-05