Ask any small-to-medium developer what kills more projects than construction costs, and they'll tell you: presale hurdles. Banks routinely require a substantial percentage of a project's end value to be pre-sold — with qualifying contracts, at qualifying prices, to qualifying buyers — before releasing a dollar of construction funding. For many perfectly viable projects, that requirement adds six to twelve months and forces developers to discount their best stock before a slab is poured. Private construction finance removes the hurdle entirely. Here's how it actually works.
Why banks demand presales — and why private lenders don't
Presales are how a bank outsources its market risk: if the stock is already sold, the bank's exit is contracted before construction begins. That logic suits the bank; it rarely suits the developer, who surrenders margin and momentum to satisfy it.
A private construction lender underwrites the same risk differently — by lending conservatively against the project's value and scrutinising the things that actually determine whether a project completes and repays:
- The numbers: gross realisation value (GRV) on completion, total development cost, and the margin between them. We lend at conservative ratios against both cost and end value, so the project carries a genuine equity buffer.
- The sponsor: your track record, your builder's capability, and whether the build contract and cost plan stand up to scrutiny.
- The exit: sell-down on completion, refinance to an investment facility, or a combination — modelled realistically, not optimistically.
In short: presales are one way to prove a project works. They are not the only way.
Who this suits
No-presale construction funding is built for projects where speed and margin retention matter more than the cheapest possible rate:
- Duplexes, townhouse projects, and boutique apartment developments
- Small commercial and industrial builds
- Land subdivisions and house-and-land programs
- Projects mid-stream — including completing a build after a bank facility has stalled
On strong margins, the developer who starts a year earlier and sells completed stock at full price routinely comes out ahead of the developer who paid a lower bank rate but gave up presale discounts and a year of holding costs to get it.
How the facility is structured
Progressive drawdowns: funds are released in stages aligned to your build program — typically verified by a quantity surveyor at each claim — so you pay interest only on capital actually drawn.
Capitalised interest: interest is typically capitalised into the facility during the build, meaning no repayments while the project has no income. Your cash stays in the project.
Terms matched to the program: facilities are structured around your realistic construction timeline plus a sell-down or refinance window, with extensions available when a project needs breathing room rather than a crisis.
What a fundable submission looks like
Developers who get funded quickly present five things clearly: the site and its planning status, a fixed-price build contract or robust cost plan, a current valuation or feasibility supporting the GRV, their own equity contribution, and a credible exit. If that package is coherent, a decision comes within 24 hours — not after a presale campaign.
The honest trade-offs
Private construction money costs more than bank money per annum. What it buys is time, certainty, and retained margin: no presale discounting, no six-month campaign before commencement, and no rigid covenants mid-build. The correct comparison isn't rate-versus-rate — it's total project outcome under each path. Run both scenarios; for most sub-institutional projects with real margin, the answer is closer than the headline rates suggest, and often favours starting now.
Test your project
Send us the site, the numbers, and the exit. We'll tell you within 24 hours whether it's fundable, at what ratio, and on what structure — with no presale schedule attached to the answer.