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FAQs

We have put together a list of frequently asked finance questions.

Bridging finance represents a short to medium-term loan, usually spanning from 3 to 12 months. Common scenarios include refinancing an expiring loan, accessing equity while selling property, or facilitating urgent settlements when traditional lenders, like banks, cannot ensure timely completion by the necessary date.

If all documentation is received and current, a bridging loan usually takes 2-5 business days to settle. It is possible to settle within 2-4 business days if the “LVR” is low and valuation assessments are simple and reliable (such as Government Rates notices). The valuation assessment is the slowest portion of this process.

When applying for an urgent short term loan it is beneficial to have all your documentation ready to settle the loan as quickly as possible. This can include current or older property valuations as well as your proposed repayment method (such as a sale, capital coming from development sales etc).

Typically bridging finance is for 3 – 6 months.

The term LVR stands for Loan to Value Ratio. It is the value of your property as a percentage of the property loan. It is calculated by taking the amount you plan to borrow divided by the price of your property.

The term ‘GRV’ refers to Gross Realisation Value, representing the retail asking prices’ total value. It’s important not to conflate ‘GRV’ with its net value after accounting for GST upon project completion, which forms the basis for loans.

NRV stands for Net Realisable Value. This is the value after deducting GST and all selling costs such as sales commissions, advertising and marketing costs. This figure is then used to assess the profitability of the project by deducting all project costs such as construction, land, finance and permit related costs.  

Construction finance is a loan that is provided to build or redevelop a property. The lender will pay your loan in smaller amounts  based on the QS (Quantity Surveyor) report. Construction loans are interest only for the duration of the build and there are no payments made until completion of the project.

Construction finance is usually for a period of 12 – 24 months.

Site acquisition funding is a type of loan that is used to finance the purchase of land for which you intend to build a property on. The block of land is used as security for the loan.

Land Funding is usually 12 – 18 months due to the fact that majority of land finance is to seek a ‘DA’ or Development Approval to develop the property.

A second mortgage is a type of loan secured against the same property as an existing first mortgage. It ranks lower in priority compared to the first mortgage in terms of repayment if the property is sold or a forced mortgagee sale. They are commonly used by developers to access equity in their project or other investment properties to fund their development project.

Development site finance is a loan to assist with the acquisition or refinance of land to prepare the land for property development.

Development finance is a loan that is provided to build or redevelop a property. The lender will pay your loan in smaller amounts  based on the QS (Quantity Surveyor) report. These loans are interest only for the duration of the build and there are no payments made until the completion of the project.