Finance for development land before construction.
Short-term funding to acquire, refinance or hold a development site while planning, approvals or the next stage of the project are progressed.
Business-purpose finance only. Funding remains subject to assessment, security and formal approval.
Development land finance
Funding the period before a site is ready to build.
Land bank finance can provide time to progress a development strategy without moving immediately into a construction facility.
It may be used to acquire a site, refinance existing land debt or carry the property while planning, design, servicing and approval work continues. The lender will assess the land in its current state and will not assume that a future approval or value uplift is certain.
This refers to commercial finance secured by land held for a future development or property strategy. It is not an investment scheme involving the sale of small interests in unapproved land.
Potential uses
Common uses for land bank finance.
The site, planning pathway, holding costs and next funding event all need to be supported by evidence.
Site acquisition
Settling the purchase of development land before the full approval or construction finance package is ready.
Land debt refinance
Replacing an existing facility to provide a workable period for planning, sale or a later construction refinance.
Approval runway
Holding a site while the project team progresses planning, design, authority or servicing requirements.
Strategic site holding
Carrying a site for a defined commercial strategy where the timing and funding costs remain manageable.
Lender assessment
What the lender will check.
The credit decision is based on the land as it stands today, together with the sponsor's plan and ability to carry the site until the proposed exit.
Location, land area, access, zoning, title interests, services and current use.
Existing approvals, proposed use, application status, likely milestones and unresolved conditions.
Current as-is value, purchase price, existing debt and total exposure after fees and interest.
Holding costs, interest funding, target dates and the proposed sale, refinance or construction facility.
Value the site as it stands
Do not rely on an approval that has not happened yet.
The proposed development may support the commercial case, but the facility must remain workable if planning takes longer, costs increase or the approved outcome differs from the original concept.
Terms to examine before commitment
- Planning delay
Allow for requests for further information, design changes, objections and authority timing.
- Interest and holding costs
Include rates, land tax, consultants, maintenance, interest and extension costs.
- Current valuation basis
Understand whether the lender relies on current use, as-is land value or another instructed basis.
- Next-stage funding
Check what must be achieved before a construction lender or purchaser can complete the exit.
Prepare the scenario
What to have ready.
A useful land finance brief connects the current site position with a realistic plan for the holding period and exit.
- Contract of sale or current loan statements
- Title, survey and property information
- Planning certificates, zoning and current approvals
- Concept plans and development application material where available
- Current valuation or market evidence
- Holding-cost and consultant budget
- Sponsor background, equity position and entity structure
- Proposed sale, refinance or construction-finance exit
Common questions
Land bank finance FAQs.
Can land be financed before development approval?
Potentially. Appetite and leverage depend on the site, current use, location, zoning, planning pathway, sponsor and exit. A future approval should not be treated as certain.
Can interest be included in the facility?
Some structures may retain or capitalise an interest allowance. That increases the total secured debt and reduces the amount available for acquisition or other costs.
How is vacant land valued?
The lender appoints or accepts a valuation on an instructed basis. That may focus on the site's current as-is value rather than a future approved or completed value.
What is the usual exit?
Common exits include sale of the site, refinance after planning approval or replacement with a construction facility. The proposed exit must allow time for valuation, credit, legal work and delays.
Tell us about the site and the next milestone.
Include the purchase or refinance amount, current planning position, holding period and proposed sale or construction-finance exit.