Finance for the work that comes before construction.
Funding for planning, design, consultants, approvals and defined early works while a project moves toward construction finance, sale or another exit.
Business-purpose finance only. Funding remains subject to assessment, security and formal approval.
Before construction finance
Moving a site from concept toward a fundable project.
Pre-development finance can fund a defined program of work before the project is ready for a full construction facility.
The facility may cover planning and design consultants, approval costs, demolition, remediation or other agreed early works. The lender will want a clear budget, evidence of sponsor equity and a realistic point at which the loan can be repaid or replaced.
Pre-development finance is not a substitute for a complete construction budget. It should fund an identified set of tasks and end at a measurable milestone such as approval, sale or construction refinance.
Potential uses
Common uses for pre-development finance.
Only agreed costs are funded, and the scope should directly support the project's next commercial milestone.
Planning and design
Architect, planner, engineer, surveyor and specialist consultant costs required to progress the proposal.
Approval and authority costs
Development application work, reports, authority requirements and other documented approval expenses.
Demolition or early works
Defined preliminary works where approvals, contracts, insurance and cost controls are acceptable to the lender.
Construction-finance preparation
Completing valuation, quantity-surveyor, tender, presale or documentation work needed for the next facility.
Lender assessment
What the lender will check.
The lender needs to see how each funded cost moves the project closer to approval, sale or a construction-ready position.
Land ownership, planning stage, approvals received and conditions still outstanding.
Consultants, early works, contingencies, timing and who controls each cost.
Relevant experience, equity invested, financial capacity and appointed advisers or contractors.
The event that completes this phase and the evidence supporting sale, refinance or construction funding.
Fund a defined scope
Every draw should move the project toward the next milestone.
A pre-development facility can become expensive if planning or design continues without a controlled scope. The budget, draw process and decision points should be agreed before funds are committed.
Terms to examine before commitment
- Scope growth
Separate essential pre-development work from optional design changes and future construction costs.
- Approval timing
Allow for authority responses, additional reports, redesign and conditions.
- Draw controls
Confirm what evidence is required before consultant invoices or early works are funded.
- Construction refinance
Identify the approvals, equity, valuation and cost evidence the next lender will require.
Prepare the scenario
What to have ready.
The initial brief should show the current project position, the work still required and the specific result the facility is expected to achieve.
- Title, ownership and current secured debt
- Planning history and approval correspondence
- Concept plans, reports and consultant proposals
- Detailed pre-development budget and timeline
- Early-works scope, quotes and approvals where relevant
- Sponsor equity invested and remaining contribution
- Project feasibility and current valuation information
- Proposed construction facility, sale or refinance exit
Common questions
Pre-development finance FAQs.
What costs can pre-development finance cover?
Depending on the lender and facility, it may cover agreed planning, design, consultant, approval, demolition, remediation or early-works costs. The approved purpose should be documented clearly.
Is development approval required first?
Not always. The purpose may be to fund work needed to obtain or amend approval. The lender will still assess the current planning position and the risk that the proposed outcome changes or is delayed.
Can the facility roll into construction finance?
Sometimes the same provider may offer the next facility, but it should not be assumed. Construction finance remains subject to its own valuation, cost, approval, equity, presale and credit requirements.
How are funds released?
Draws may be reimbursed or paid against invoices, reports and evidence that agreed milestones have been met. The process depends on the lender and the funded scope.
Tell us what needs to be completed before construction.
Include the current planning status, consultant and early-works budget, available security and the milestone that repays or refinances the facility.