How to Improve Your Chances of Approval for Development Finance

How to Improve Your Chances of Approval for Development Finance

Securing development finance is a crucial step for property developers and builders looking to bring their vision to life. Property development finance can cover a wide range of expenses, from land acquisition to construction and finishing costs, making it an essential resource for ambitious projects. However, the approval process can be complex, with lenders assessing various aspects of the property development project, the developer’s experience, and the financial feasibility.

This guide provides practical tips to enhance your chances of getting approved for finance. By preparing your development finance application thoroughly and engaging with a trusted loan specialist like Assured Management, you can set your project on the path to successful financing.

1. Understand What Lenders Are Looking For

To increase your approval chances, it’s helpful to understand what lenders prioritise when assessing applications. Key considerations include the feasibility of your project, your experience and credibility as a developer, and your financial stability. Ensuring each of these factors is well-documented within your application helps establish you as a credible applicant.

While non-bank lenders such as Assured Management may offer more flexibility than traditional banks, they still require a well-documented application that demonstrates a viable and thoughtfully planned project. These lenders focus on factors such as project potential, applicant capability, and thorough planning, which can often allow for more bespoke financing solutions. Familiarising yourself with this lending criteria helps you target your application to showcase your strengths and address any potential areas of concern.

2. Build a Detailed Project Plan

A comprehensive project plan is foundational to any successful finance application. Your development plan should outline the project’s scope, from initial concepts to detailed construction phases, timelines, and final deliverables. This clarity demonstrates to lenders that you have a solid vision and realistic expectations for completion.

Including a risk assessment in your plan adds an extra layer of credibility. Consider potential challenges, such as supply chain delays or rising material costs, and outline your strategies for addressing them. Learn more about the common risks in property development.

Additionally, a brief market analysis can further validate your project by showing there is demand for the type of development you’re pursuing. In high-demand areas like SE Queensland and Northern NSW, this can be particularly compelling for lenders.

3. Organise Financial Documentation Carefully

Financial transparency is essential when applying for property development finance. Start by gathering personal financial documents, such as bank statements, tax returns, and credit reports, which demonstrate your financial stability and reliability. These credit history documents help paint a clear picture of your ability to manage financial responsibilities.

Project financials are just as important. Your budget should detail all expected expenses and project costs, including land acquisition, building and construction costs, permits, and any additional fees. Providing a realistic and well-researched cost breakdown, as well as contingency funds to cover unexpected expenses, reassures lenders that your project is financially secure.

4. Demonstrate Relevant Experience and a Track Record of Success

While it's not impossible for a first-time developer to obtain development funding, experience in property development is a significant advantage when seeking finance approval. Highlight previous projects you’ve successfully completed, as well as any unique expertise you bring to the table. A track record of delivering quality projects on time and within budget enhances your credibility as an experienced developer and gives lenders confidence in your ability to handle complex projects.

Having a reputable team in place also contributes to lender confidence. Working with experienced architects, contractors, and project managers shows that you’re committed to quality and that your project is backed by professionals.

5. Ensure Sufficient Equity Contribution

A strong equity contribution reduces lender risk and boosts your chances of approval.

Lenders evaluate the Loan-to-Value Ratio (LVR) to confirm that projects are financially sound and not over-leveraged. A typical LVR requirement is around 70%, which means you’ll need to contribute at least 30% equity. Exceeding this minimum signals financial stability and can sometimes improve your chances of securing more favourable loan terms.

Assured Management lends to 65% LVR, which applies to both the 'As is' valuation and the 'Gross Realisation' (including GST). Learn more about our security ratio here. 

A strong equity contribution not only demonstrates your commitment but also enhances project feasibility by providing a buffer against market fluctuations during development, adding an extra layer of security for both you and the lender.

A higher equity base may also give you access to more flexible financing options, especially with private lenders who can tailor development loan structures to meet your project’s unique requirements.

The Source Of Your Equity

Transparency in your equity’s origin is crucial for a smooth approval process. Lenders require clear, verifiable documentation that demonstrates your funds are legitimate and stable.

  • Document Equity Sources: Whether your equity comes from savings, asset sales, or investments, be prepared to provide records that verify these sources. For complex sources, such as overseas investments, detailed documentation helps reassure lenders and can expedite approval.
  • Due Diligence and Non-Bank Lenders: Non-bank lenders, who may work with unconventional financial arrangements, often require additional verification of equity. Being ready with organised, transparent records - such as bank statements or sales receipts - can simplify this process and speed up your application.

A well-documented equity contribution with verifiable sources not only boosts your chances of approval but can also position you for more flexible financing options and smoother negotiations.

6. Partner with a Trusted Loan Specialist

Working with a loan specialist experienced in property development finance offers significant advantages. Assured Management’s team has in-depth knowledge of the SE Queensland and Northern NSW markets and can provide guidance tailored to your project’s unique requirements.

Beyond market insights, private lenders such as Assured Management also offer flexibility in loan structures and faster processing times, making them an excellent choice for developers who need timely and adaptive financing solutions.

7. Focus on Pre-Approval Preparation

Obtaining pre-approval is an effective way to streamline the application process and confirm your borrowing capacity upfront. Before applying, ensure you have a pre-application checklist of essentials, including your project plan, financial documents, team credentials, and equity documentation. This preparation shows lenders that you are organised, committed, and ready to proceed with the project.

Pre-approval also provides you with a clearer understanding of how much you can borrow, making it easier to budget and plan for each phase of the project.

Finance with Assured Management

Getting approved for development finance doesn’t have to be a daunting process. With a well-prepared application and documentation, demonstrating a comprehensive project plan, and showcasing your experience, you significantly improve your chances of success. Engaging a specialist like Assured Management not only simplifies the application process but also provides access to flexible and targeted financing solutions suited to SE Queensland and Northern NSW markets.

Assured Management (AML) is a flexible, non-bank lender with the expertise to work directly with property developers to complete projects in a timely and profitable manner. We provide tailored construction loan solutions for:

If you’re ready to move forward with your project, please contact Assured Management and speak directly to the loans approval team by phoning (07) 5578 6177, or send through your enquiry online to discuss how our team can help you secure the development finance you need to bring your vision to life.