4 steps to prepare a property development financing proposal | Trilogy Funds Australia

How to prepare a property
development financing
proposal in 4 steps

A profitable property development, a successful business and a high-performing investment portfolio, all have many things in common. One of these is timing – miss an opportunity and your business could go bust, enter or leave the property market at the wrong time and you could make a loss, miss the boat on a great investment and you could be left feeling sorry for yourself while your fellow investors reap financial rewards.

With timing being such an integral aspect of successful commerce, having the skills to seek financing, quickly, efficiently and effectively can be critical. But what makes a good property development financing proposal? And, how can you ensure you have access to finance when you need it most?

With experience ranging from commercial lending, development and construction, project management and finance, our Lending Team understand the importance of a well-constructed financing proposal. Here, we share Portfolio Manager’s advice for preparing your next proposal.

1. Showcase your property development experience

Experience can often play a large part in the success or failure of your proposal.

As an applicant, you need to demonstrate that you have the right capabilities to execute the project or property development. Not sure you alone have the right skills in your repertoire? Be sure to clearly highlight the skills of the wider team or show evidence of partnering with experienced consultants to help meet any potential shortfalls in your team’s skill set.

2. Your reputation speaks louder than words

If you’re a repeat borrower with a good reputation and excellent relationships with builders and consultants that are held in high regard, make sure your application reflects your strong track record.

3. Provide some insight into your business plan


Your proposal is effectively a business plan that showcases your vision and backs it with tangible evidence. Lenders want to see an achievable project timeline, cashflow and feasibility projections.

Aside from a good credit rating and alliances with the right people to get the project done, lenders also need to see an appetite for the development offering.

Current economic conditions and the location of the development are just two examples of factors that could impact the demand for the project being planned. If your development is deemed unsuitable for the area, there is too much local competition or there is insufficient equity in the transaction, a lender may decide not to endorse your application so be sure, to consider these finer details in your proposal.

4. Be clear from the get-go about what you require from your lender

In order to keep the approval process moving efficiently, it’s important to be clear about the amount and type of finance you require from the get-go, and how you intend to repay, whether it be through sales or re-finance. In the case you’re not 100% sure about the best way to proceed, talk to a Portfolio Manager about what sort of finance would suit the property development activity or asset you’re looking to fund. If you have guarantors, outline their capacity to back your development or if there is any further property to be used as security. While they aren’t always required, be sure to highlight any existing pre-sales to strengthen your proposal.

Once you’ve submitted your property development finance proposal for approval, the lender will analyse it against their own set of lending criteria. Sometimes a project just isn’t the right fit for a lender, or it raises a few cautionary flags. The chances of being approved will be maximised if you can put together a sizeable deposit and a well-developed proposal that demonstrates that you have thought about the risks and have steps in place to address them. Lenders aren’t in the business of taking senseless risks as they want to see a good return on their investment too.

What can you do if you are declined?

There are many reasons why you’re financing proposal could be declined and that is why good planning and preparation is imperative. Don’t be disheartened, speak with your Portfolio Manager and establish the reasons why it was declined. Lenders have different criteria and each application is assessed on its individual merits. If you can determine what prevented your proposal from being accepted, you can take action to address those concerns before you take another approach.

As one of Australia’s largest specialist lenders, Trilogy is currently funding over 60 loans secured by registered first mortgages over Australian property, with loan values ranging from $3 – $15 million. If you have a question about acquiring your own property development finance or want more insight into preparing an effective proposal, get in touch with the Trilogy lending team.

This article has been prepared for prospective borrowers and provides information only about Trilogy’s lending services. Trilogy is not a licensed credit provider and does not make loans FINA regulated by the National Credit Code. The source of Trilogy’s loans may include managed investments schemes registered with ASIC, as well as other private lending arrangements with high net worth investors. If you would like more details on our investment opportunities, then please contact us.