Construction Finance

What is the Construction Finance in Australia?

Construction Finance, also known as “Self-Build Loan” or “Commercial Construction Finance” is a short-term Loan type which is carried out for the financing of Building, or construction of a Building or a real estate project. In noteworthy of mentioning, construction Finance is also valid for Property purchase projects & renovation projects in Australia. The borrower could be the owner of the property, constructor, sub constructor or entrepreneur (for workplace construction or renovation) On the subject matter of construction Loan, the loan fund is calculated combining the value of the land plus the construction cost and further, 80% value of the total. On the subject matter of construction finance, the value of Loan increases with every progressed payment for construction till the Loan fund is fully withdrawn and utilised.

Construction Finance Features & Benefits

Features—

  • Non-Recourse financing is valid in the context of commercial construction finance
  • Off-Balance Sheet Loan as there are more than two participants, the borrower, the lender and the construction party (to whom payments are made throughout the construction phase). Thus, no impact on the balance sheet goes visibly.
  • Off-Balance Sheet Loan as there are more than two participants, the borrower, the lender and the construction party (to whom payments are made throughout the construction phase). Thus, no impact on the balance sheet goes visibly.
  • Shared Loan Risk as project participants are more than one (other than the lender)
  • Difficult approval in the presence of Risk Allocation
  • Excess Cash Flow leading to Loan amortization
  • Lesser Risk on the part of the Lender, more on construction party’s end
  • Higher Cost of Financing parallel to market risk and political risk

Benefits—

  • In the presence of Construction finance, the borrower receives advanced fund within a minimum time period and thus, the rush of paying wages and suppliers for can be made on-time.
  • Commercial construction finance grants confidential facility through which the risk of “customer know-how” is eliminated
  • Access to bigger working capital which helps in the management of daily operations without worrying about the payment status of outstanding accounts receivable
  • Cash flow enhancement as no additional fund is taken from the company’s generating revenue
  • Covers 80% of LVR, Loan to value ratio, therefore, the borrower needs to risk only 20% of its own funds into construction

Can I qualify for Commercial Construction Finance?

There are a number of eligibility criteria that one must stand upon to qualify for commercial construction finance, these are—

  • Must not be minor
  • Must be a citizen of Australia, or Australian immigrant
  • To present ABN (Australian Business Number), in case of commercial construction
  • The borrower must be a contractor, subcontractor or a qualified Builder
  • Must present a detailed building plan comprising in the floor plan, cost, inventory of raw material, information of suppliers & subcontractors (if any), and profit projections
  • Must present a licensed Builder (in case the borrower is not opting to build the property)
  • Documents to prove the willingness to repay the Loan
  • Appraised Property Value (value of finished goods)

If you are fulfilling all the given criteria, you are qualified to get construction finance Australia. Moreover, the lenders hold the right to carry out own loan qualifying guidelines based on documents akin to BAS (Business activity statements) and repayment history of the Borrower.

How to get construction finance in Australia?

With us, you can get construction finance in Australia into three simple steps—

Apply Online

You can apply for construction finance online on our website at quick click on “apply now.” This click will lead to application form tab. After filling this application, our loan consultant will provide approval within a minimal time period of 5 minutes.

Verified Documents

Next step is to submit the required documentation to us. These documents may include Business activity statement, building contract, building plan, builders insurance, surveyor report, and others to prove the ability of repayment of loan amount.

Loan Transfer

Once documents are inspected and approval is received from our end, the loan fund will be transferred to your bank account. The line of Credit and re-drawing facilities are made available with us to our clients (borrowers) for easy access to the funds whenever to progress construction payment.

Why Maxiron Capital

Our Construction Finance Australia qualification focal criteria are very simple, you can keep the potential to get approval with bad credit history as well. Start-ups are welcomed to apply for loans with us. We support anywhere Australia quick 5 minutes’ loan approval online with lowest interest rates (1% per month). Our flexible repayment facility set us apart from other profit-concentrating banking institutions and private lenders within the boundaries of Australia. With us, you can ease your mind on the subject of cash flow balance as our loan fund is easily accessible through Line of credit availability and repayment flexibilities.

Recent Case Studies:


Completed Land Subdivision

Amount: $15,200,000
Terms: 8 months
LVR: 75%
Location: North-West Sydney NSW

Role: Refinance current senior loan provider and provide further funding to al low an equity release while allowing for the sell down of residual lots.


Development Finance

Amount: $3,500,000
Terms: 3 months + 3 months rollover
LVR: 70%
Location: Inner Sydney NSW

Project: Demolition of existing structures and construction of 32 room boarding house.

Role: Provide a capitalised bridging facility to fund on-site works while delayed capital was being transferred on-shore, which covered cost to complete and bullet repayment of loan facility.


Winding up Application Dismissed

Amount: $250,000
Terms: 6 months
LVR: 60%
Location: Western Sydney NSW

Security: First Registered Mortgage over Residential Property

Role: The Accountant approached a number of lenders, however, they were experiencing significant delays due to valuation timeframes, condition precedents and upfront costs to proceed to settlement.

Within 24 hours, Secured Lending funded the cl ient and the winding up appl ication was dismissed.

Referrer: Accountant.