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Construction Finance

Staged drawdown funding to build residential and commercial projects.

Construction finance is project-focused funding that pays for the build itself - released in stages as the project progresses from slab through to completion. Commercial Property Funding structures construction loans for developers building townhouses, units, spec homes and commercial sites across Australia, with low or no pre-sale requirements and decisions made on the merits of the project rather than rigid bank credit policy.

Overview

  • Loan SizeUp to $10 million
  • Maximum LVRUp to 65% GRV (up to 75% with 2nd mortgage)
  • Interest RatesFrom 7.5% p.a.
  • Loan TermsUp to 24 months
  • Property SecurityResidential or commercial
  • Pre-salesLow or no pre-sales required
  • DrawdownsStaged in line with construction milestones
  • Interest StructureCapitalised - no monthly debt servicing during the build
  • Takeout FundingAvailable on completed projects
  • Settlement SpeedLetter of Offer in 48 hours; settlement within 7 days of executed docs
  • LocationAvailable across all Australian states and territories
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Construction finance is project-focused funding that pays for the build itself - released in stages as the project progresses from slab through to completion. Commercial Property Funding structures construction loans for developers building townhouses, units, spec homes, commercial assets, and industrial sites across Australia, with low or no pre-sale requirements and decisions made on the merits of the project rather than rigid bank credit policy.

Construction Finance in Australia

A construction loan funds a build over its lifecycle - released progressively as work is completed rather than drawn down in a single lump sum at settlement. Funds typically flow at defined milestones: slab, frame, lock-up, fixing, and completion. A quantity surveyor confirms each stage before the next drawdown is released, keeping the loan aligned to actual on-site progress.

Bank construction lending tends to apply rigid criteria - high pre-sale percentages, full borrower serviceability tests, fixed construction-start dates, and conservative GRV ratios calibrated for risk-averse credit committees. That works for some deals. For developers with limited pre-sales, sites the bank considers too complex, first projects without long track records, or timing pressure that won't wait for a full bank credit cycle - those criteria delay or kill the project entirely.

At CPF, construction finance is asset-led and project-led. Assessment focuses on the site, the feasibility, the development approval, the builder, and a credible exit strategy - typically the sale of completed stock, a refinance to a longer-term facility, or progression to a CPF residual stock loan if some stock remains unsold at the end. Construction loans are available to company and trust borrowers, including SPVs structured for a single project.

Why Developers Use CPF Construction Finance

  • img Up to 65% GRV (up to 75% with second mortgage)
  • img Low or no pre-sale requirements
  • img Staged drawdowns aligned with construction milestones
  • img Capitalised interest - no monthly debt servicing during the build
  • img Funds residential and commercial construction
  • img Takeout funding available when the project completes
  • img Asset-led assessment - no full serviceability test
  • img No brokerage clawbacks - broker commissions stay paid

Construction Finance by Project Type

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Townhouse Construction

Funding for townhouse and duplex projects - purpose-built for 2-to-4-dwelling developments with low or no pre-sale..

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Unit Construction

Multi-unit residential construction - apartments and unit blocks funded against GRV, with staged drawdowns.

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Commercial Construction

Build offices, warehouses, mixed-use developments against the projected end value.

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Spec Home & Specialty Builds

Single-dwelling spec homes, splitter blocks, and build-on-back projects - assessed on completed value with no pre-sales.

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Submit your project for assessment or speak with our team about construction finance for your next development.

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When Banks Won't Fund the Build

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Insufficient pre-sales to meet bank thresholds
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First-time or limited-experience developers
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Sites the bank considers too complex or non-standard
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Construction-start deadlines that won't wait for bank credit cycles
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Existing facility expiring before the build is finished
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Borrower structures (SPVs, trusts, JV) banks struggle with
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Partially completed projects requiring takeover funding
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Self-employed borrowers without traditional income evidence

frequently asked questions

A construction loan is project-focused funding that pays for a build as it progresses - released in stages tied to construction milestones such as slab, frame, lock-up, fixing, and completion. Each drawdown is verified through a quantity surveyor inspection before funds are released.

Bank construction loans typically require fixed pre-sale percentages, full borrower serviceability tests, and conservative criteria around builder track record, site type, and project size. CPF assesses the project on its merits - the site, feasibility, DA, builder, and exit strategy - and funds projects with low or no pre-sales. Settlement is measured in weeks, not months.

Funds are released progressively as construction milestones are completed - typically slab, frame, lock-up, fixing, and practical completion. A quantity surveyor inspects each stage and confirms the work is complete before the next drawdown is released.

Up to $10 million, structured as up to 65% of Gross Realisation Value (GRV). Loans up to 75% GRV are available where a second-mortgage component is included. The exact lend depends on the project, location, builder, and end-product mix.

Gross Realisation Value (GRV) is the total expected sale value of the completed project - every unit, dwelling, or asset added together. Construction loans are typically expressed as a percentage of GRV: at CPF, that's up to 65% as a first mortgage, or up to 75% where a second-mortgage component is included.

No fixed pre-sale percentage is required. CPF construction finance can be structured with low or no pre-sales depending on the project, location, and end-product mix. Pre-sales help - they confirm a market and lock in some of the exit - but they aren't a hard gate to settlement.

The basics - development approval, council plans and permits, fixed-price building contract with progress schedule, builder's details, builder and site insurance provisions, and an "as-if-complete" valuation. Borrower entity details and a clear exit strategy round out the submission. Your CPF contact will guide you through what's needed for your specific project.

Yes. Smaller projects - duplexes, two-lot subdivisions, and single spec homes - are common first-developer scenarios. Where the project stacks up, the builder is reputable, DA is in place, and the exit is credible, lack of prior development track record isn't a hard gate.

Yes. CPF can fund partially completed projects where the existing facility is expiring or the project needs to switch lenders mid-build. Assessment looks at the work completed, the cost to complete, the builder's program, and the condition of subcontractor and supplier accounts.

A no-cost, no-obligation Letter of Offer can be issued within 48 hours of a complete submission. Settlement typically follows within seven days of executed loan documents.

The loan is repaid through the agreed exit - typically the staged sale of completed stock, a refinance to a longer-term facility, or progression to a CPF residual stock loan if some stock remains unsold. Takeout funding is available on completed projects.

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Funding solutions designed for property developers, investors, and brokers across Australia.

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