Private Lenders for Property Development in Australia: Complete Developer's Guide

Australian property developers may now find that the natural first call for construction finance is no longer one of the major banks. According to ASIC’s September 2025 report on private credit in Australia, the domestic private credit market is estimated at roughly $200 billion in assets under management, with commercial real estate debt understood to constitute approximately half of that total. Stamford Capital’s 2025 Real Estate Debt Capital Markets Survey cites ASIC figures showing private lending AUM rose from $57.1 billion in 2014 to $148.6 billion in 2024, close to a tripling in a decade.

For developers ranging from first-time operators piecing together $2 to $10 million townhouse projects through to mid-market sponsors delivering $20 to $100 million-plus apartment, mixed-use or build-to-rent schemes, understanding the private lender landscape is no longer optional. The ability to identify the right capital partner, structure a credible deal, and avoid the predatory edges of the market may be the single largest determinant of whether a feasibility actually gets built. This guide covers the lender categories, the named players, what they typically look for, indicative pricing and structures, the application process, and the risks worth navigating carefully.

What “private lender” actually means in Australian development finance

In Australia, the terms “private lender”, “non-bank lender” and “alternative lender” are often used interchangeably, but they describe a wide spectrum of capital providers that share one feature: none of them is an Authorised Deposit-taking Institution (ADI) regulated by the Australian Prudential Regulation Authority (APRA) in the way the major banks are. Most are instead regulated by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001 and the Australian Financial Services (AFS) licensing regime.

A useful taxonomy of the players a developer is likely to encounter:

Institutional commercial real estate debt managers

These are the heavyweight CRE debt managers, typically managing capital on behalf of superannuation funds, sovereign wealth investors, global pension funds, insurers, family offices and high-net-worth wholesale clients. Examples include MaxCap Group (a strategic investment partner of Apollo Global Management), Qualitas (ASX:QAL), Wingate (now wholly owned by Singapore-listed CapitaLand Investment following its A$200 million acquisition completed in late 2024), Metrics Credit Partners, Merricks Capital, MA Financial, and Centuria Bass Credit within ASX-listed Centuria Capital Group.

Mortgage funds and managed investment schemes

These are pooled investment vehicles registered with ASIC, typically open to wholesale investors and in some cases retail. La Trobe Financial, Trilogy Funds, Thinktank, Pallas Capital’s Pallas Funding Trust, the Centuria Bass Credit Fund and the MaxCap Investment Trust are examples. They operate as registered managed investment schemes or wholesale-only equivalents and are subject to ASIC oversight under the AFS licensing regime, with retail-facing products also subject to design and distribution obligations (DDO).

Balance-sheet non-bank lenders

These lenders fund predominantly from their own balance sheet, parent capital, securitisation warehouses (often supplied by major banks) or institutional mandates, rather than from a discrete unit-trust pool. Assetline Capital (part of AltX Financial Group), Liberty Financial (ASX:LFG), Resimac (ASX:RMC), and Funding.com.au sit closer to this end of the spectrum. The line between these and mortgage funds blurs in practice, since many non-banks operate both warehouse-funded and fund-funded products.

Family offices and high-net-worth lenders

A significant proportion of capital flowing into smaller, shorter-duration property loans in Australia is private family money, deployed either directly or via syndicates and “club” deals arranged by intermediaries. These tend to write smaller-ticket, faster-decision facilities, often bridging or pre-development.

Specialist shorter-term private lenders

This is the most heterogeneous group, covering names such as Chifley Securities, Private Mortgages Australia, and others. They typically lend for shorter terms (3 to 24 months), faster settlements and at higher pricing.

Fintech and marketplace lenders

Platforms like Zagga, AltX and Funding.com.au use online origination, technology-led credit processes and (in some cases) wholesale investor marketplaces to fund property loans. Their economics are similar to mortgage funds but with a more digital front-end.

Debt advisors and arrangers

Stamford Capital is perhaps the best-known commercial property finance arranger; it both publishes the annual Debt Capital Markets Survey and acts as a debt advisor placing loans with banks and non-banks. Development Finance Partners, Acumen Finance Group, Westbourne, Loftus Lane, and Holden Capital play similar advisory or arranger roles. They are not typically lenders in their own right but are often the route a developer reaches the right private capital pool.

The post-GFC and post-APRA story is what shaped this market. After the 2008 Global Financial Crisis, prudential regulators globally (and APRA in Australia) raised bank capital requirements for higher-risk lending, particularly to land acquisition, development and construction. APRA’s 2017 macroprudential interventions, together with ongoing capital framework reforms, constrained bank construction lending appetite. The vacuum was filled by private credit. The Reserve Bank of Australia’s October 2025 Financial Stability Review observes that non-bank lenders continue to grow as a source of finance in the Australian economy, with registered financial corporations expanding their market share of housing and business lending.

Why developers turn to private lenders: the core triggers

Banks are still preferred when their pricing and terms work, because they remain the cheapest source of construction debt. The decision to approach a private lender is generally driven by one or more of the following triggers:

• Speed. A bank construction facility commonly takes 8 to 12 weeks or longer from application to settlement, and frequently more for first-time or non-relationship borrowers. Private lenders routinely settle in 2 to 6 weeks, with some bridging products in 24 to 72 hours. Stamford Capital’s 2025 survey reports a 14.4% reduction in settlement times over three years.
• Lower or no presales. Major banks providing residential construction finance commonly require qualifying presales covering 70 to 100% of the debt facility. According to the same Stamford Capital data, 71% of lenders now accept presales of 35% or less, with 29% having removed presale requirements entirely for selected deals. Almost all of that flexibility comes from non-banks.
• Pre-DA and land acquisition. Banks rarely fund speculative pre-DA site purchases. Private lenders may provide pre-development and land bank facilities at 40 to 55% LVR of as-is value.
• Borrowers below bank thresholds. Many of the major banks effectively will not look at projects below $10 million total development cost. Private lenders fund deals from $500,000 to $30 million routinely, and institutional private credit will fund well above that.
• Foreign borrowers, complex sites, irregular history. FIRB-affected sponsors, sites with contamination or heritage overlay, projects with non-standard product mix, or borrowers with credit blemishes are typical private-lender territory.
• Construction underway or refinance in distress. Where a build is mid-flight and a bank facility has run into covenant breaches or builder issues, private lenders are often the only path forward.
• Residual stock loans. When a project completes with unsold units, private lenders may refinance the residual stock at higher leverage than banks. La Trobe Financial’s residual stock commercial loan, for instance, may extend up to 75% LVR (inclusive of interest budget).
• Equity-light structures. Stretch senior, mezzanine and preferred equity products from private lenders may allow developers to reduce the cash equity required.

The trade-off is consistent: speed, flexibility and certainty in exchange for cost. Whether that trade is worthwhile is a feasibility question, and developers may benefit from modelling the all-in cost of capital (rates, line fees, establishment fees, exit fees, capitalised interest) against the bank alternative under a defensible probability of bank approval. Our property development finance guide and construction finance guide cover the bank side of that comparison in detail.

The Australian private and non-bank development lender directory

The following is a working directory of active private and non-bank lenders to property developers in Australia, current as at the most recent public disclosures. Figures change frequently and could be confirmed directly with each lender or via a debt advisor before relying on them.

Institutional and wholesale CRE debt managers

MaxCap Group was founded in 2007 and is headquartered in Melbourne, with offices in Sydney, Brisbane, Perth and Auckland. It operates as a strategic investment partner of Apollo Global Management. Per MaxCap’s own disclosures, its institutional platform has originated and managed more than $8.6 billion of Australian CRE debt across 324 loans, with current funds under management and advice of approximately $3.3 billion. The MaxCap Investment Trust offers a First Mortgage product targeting RBA cash rate plus 5.00% and a High Yield product targeting cash rate plus 8.00%. Typical deal size is mid-market institutional, generally $20 million to $200 million-plus, wholesale-client only.

Qualitas is an ASX-listed real estate alternative asset manager (ASX:QAL) with approximately $9.5 billion of committed capital. Active across senior CRE debt, mezzanine, preferred equity and direct equity, with a strong focus on residential development including build-to-rent.

Metrics Credit Partners is among the largest Australian alternative asset managers. ASIC has identified Metrics as exceeding $15 billion AUM. Metrics manages corporate, infrastructure and CRE debt strategies, including listed vehicles such as the Metrics Master Income Trust and Metrics Income Opportunities Trust. Metrics is currently subject to an ASIC review on loan valuation, governance and exposure concentration, which borrowers and counterparties may wish to monitor.

Wingate was acquired by Singapore-listed CapitaLand Investment for A$200 million plus an earn-out in December 2024. Wingate has executed more than 350 transactions with over A$20 billion in real estate value, including a $94 million facility for Art Group’s Soho Precinct in Dickson ACT (370 apartments) and a $118 million senior debt construction facility for the Ace Hotel in Surry Hills. Wingate Property typically targets transactions from approximately $20 million to $200 million-plus.

Merricks Capital was established in 2007 as a multi-strategy private credit manager with capability across CRE, agriculture and specialised infrastructure and industrial. The Merricks Capital Partners Fund delivered 8.1% for calendar 2024, with construction loan attachment points typically at 60 to 65% LVR.

Centuria Bass Credit is wholly owned by ASX-listed Centuria Capital Group following Centuria’s move to 100% ownership. AUM is in the order of $1.6 billion, and per public disclosures, the business has refinanced more than $592 million of real estate in 2023. Loan sizes typically range from $5 million to $150 million, lending across construction, residual stock, bridge and investment loans.

Pallas Capital is Sydney-headquartered, with operations in Melbourne, Brisbane, Auckland and Christchurch. As at Q4 2025 disclosures, its loan book consisted of 63 construction loans and 246 non-construction loans including 82 in New Zealand, with default rate at quarter-end of 2.2% (since reduced to 1.5%) and weighted average LVR around 65%. Pallas operates the Pallas Funding Trust (PFT) and the Pallas Funding Trust No. 2, a $500 million vehicle with senior bank funding lines, and offers senior first mortgages typically up to 65% LVR (or 70% on investment loans).

MA Financial is an ASX-listed alternative asset manager with substantial real estate credit and lending franchises (including MA Money and MA Real Estate Credit), active across CRE, residential mortgages and specialty finance.

Tanarra Credit Partners is part of Tanarra Capital, which manages approximately A$3.2 billion (December 2025) across five verticals including private credit and special situations debt across Asia-Pacific. Distressed and stressed credit capability is a Tanarra differentiator.

Aquasia is Sydney-based, founded in 2009 by ex-ABN AMRO senior management. The Aquasia Private Investment Fund had approximately $523 million AUM as at February 2026, targeting return in excess of 10% p.a. across private market debt, real estate lending, opportunistic credit and convertibles. Aquasia Investment Services was established in 2024 to originate, syndicate and manage real estate credit specifically.

Aura Group is an Australian and Singaporean asset manager with private credit, private equity and venture strategies, including SME-backed credit relevant to property funding stacks.

Alceon and EG Funds Management are Sydney-based alternative investment managers, both active in CRE debt and direct property, with appetite for structured deals.

Mortgage funds and broader non-bank lenders

La Trobe Financial is one of Australia’s largest non-bank lenders (majority owned by Brookfield since 2022, having previously been owned by Blackstone). It is active in residential and commercial mortgages including residual stock commercial loans at a current rate around 7.99%, max LVR 75% inclusive of interest budget, and max loan $50 million with tiering. La Trobe’s retail Australian Credit Fund and US Private Credit Fund were subject to ASIC interim DDO stop orders in September 2025, which is worth ongoing monitoring.

Trilogy Funds is a long-established Australian mortgage fund manager, with retail and wholesale property credit funds focused on first-mortgage construction and investment lending.

Thinktank Property Finance is a specialist commercial property lender with set-and-forget commercial mortgage products (no annual reviews, no ongoing fees), active in standard and SMSF commercial property finance.

Balmain NB Commercial Mortgages is one of Australia’s longest-operating non-bank commercial mortgage managers, providing commercial real estate finance via a panel of institutional and wholesale capital partners.

Active shorter-term and specialist private lenders

Assetline Capital is part of AltX Financial Group, with offices in Sydney, Melbourne and Brisbane. Since inception in 2012 the parent group has funded more than $6.5 billion in property-backed transactions. Product suite includes Horizon Mortgages, Short-Term Capital ($250k to $40m, max 70% LVR, terms up to 36 months), Construction Capital, and Clinch Bridging Loans, with secured residential or commercial property facilities from $500,000 to $40 million.

Chifley Securities is a two-decade-old commercial property finance broker and arranger specialising in development finance and structured investment facilities, with both bank and private capital relationships.

Bridgit is a specialist bridging finance fintech, predominantly residential.

Funding.com.au is an online commercial and bridging lender targeting fast-decision smaller-ticket loans.

Zagga is a wholesale-investor-funded marketplace lender with a secured first-mortgage focus.

AltX is the marketplace sister brand to Assetline within AltX Financial Group, used for wholesale investor participation.

A wider cluster of names operates predominantly in shorter-duration, higher-rate private lending, including Private Mortgages Australia, ARM Capital and Mountain Capital, among others. Typical loan sizes typically range between $500,000 and $20 million, terms 3 to 24 months, rates from approximately 9% to 18%-plus p.a., and LVRs frequently up to 65% of as-is value or GRV. Public disclosure varies widely; many are wholesale-only, with information provided on a deal-specific basis. Borrowers may be best served by using a debt advisor or specialist broker rather than approaching these lenders cold, since the variation in pricing, fees and behaviour is large and not always transparent on websites.

Debt advisors and specialist brokers

These firms are not lenders, but are the primary route many developers reach the right private capital pool:

• Stamford Capital is Australia’s leading commercial property finance brokerage and publisher of the annual Debt Capital Markets Survey
• Development Finance Partners is a boutique structured property finance advisory active in $5 to $100 million-plus transactions
• Gallagher Capital Markets is the global Gallagher group’s debt advisory arm in Australia
• Acumen Finance Group, Holden Capital, Westbourne, Loftus Lane and Provincia Capital are boutique debt advisors with developer-focused practices

Several of the lenders listed (notably MaxCap and Qualitas) operate origination teams that take direct approaches and do not always require an intermediary; others prefer broker-mediated flow.

What private lenders actually look at when assessing a deal

Private lenders evaluate development finance applications on broadly similar lines, though the weighting of each factor varies. The core checklist may typically include:

Sponsor track record and experience

The first read on most files is the sponsor. A first-time developer doing a six-townhouse project is generally read very differently from a sponsor with three completed projects of similar scale and typology. Track record could offset weaker site economics or thinner equity, and is one of the most influential variables in pricing.

Equity contribution (“hurt money”)

Most private lenders typically look for 20 to 35% equity of total development cost. Pallas Capital, Centuria Bass and most institutional managers may price up or decline files with equity below that band, on the basis that thin developer equity asks the lender to take all the risk. Mezzanine and preferred equity layers could reduce required cash equity but at meaningfully higher pricing.

Project feasibility quality

Lenders increasingly want clean, defensible feasibility models that cover acquisition costs (including stamp duty, GST margin scheme treatment, finance costs), construction, professional fees, contingency, sales revenues and timing. A residual project margin of approximately 18 to 25% on cost is generally regarded as the threshold that sits comfortably inside private credit appetite. Margins below that band tend to push files toward decline regardless of sponsor pedigree. Feasly’s feasibility software handles Australian-specific complexity such as GST margin scheme treatment, LTC and LVR calculations, and multiple funding stack modelling, which may help present a credible model at IM stage.

Site control and DA status

A site with development approval (DA) in hand or a clear pathway is generally funded on different terms from a speculative pre-DA acquisition. Pre-DA loans may typically be sized at 40 to 55% of as-is land value.

Builder selection and contract

A licensed, insured builder with completed projects of comparable typology and an iCIRT rating (Equifax’s independent contractor rating, used by approximately half of NSW lenders per the 2025 Stamford survey) is generally a strong positive. A fixed-price head contract with a credentialled builder, and realistic contingency, is generally a precondition. Following the wave of builder collapses, almost all lenders now require detailed builder due diligence including financial statements, project pipelines and credentials.

Presales

For senior bank construction loans, qualifying presales of 60 to 100% debt cover may typically be required. For non-bank senior, 30 to 50% or less is common. Stretch senior and certain private lenders may accept zero presales with a robust exit story. Where presales are below covenant, the file becomes a “no-presales” deal with a private credit price tag attached. As Switchboard Finance notes, no-presales development finance is now a recognised product category, particularly for projects where sales velocity is uncertain or marketing timelines compress economic returns.

Exit strategy

This is heavily weighted, especially on no-presales deals. Lenders typically need a credible repayment story at practical completion, either a sell-down with current absorption evidence and a clear sales programme, or a refinance into a residual stock or commercial investment loan with documented serviceability.

Quantity Surveyor reports

An independent QS report is generally standard, both at credit decision and as the basis for progress-claim drawdowns through the construction programme. Typical QS fees may run around $1,500 to $3,500 per progress inspection.

Independent valuations

“To Be Constructed” (TBC) and “On Completion” valuations from a panel valuer are typically standard. Many lenders also commission an “as-is” valuation. Valuation costs may typically run $8,000 to $25,000-plus depending on scale.

Personal and corporate guarantees

Almost all private development facilities are at least limited recourse against the borrowing SPV with personal and corporate guarantees from sponsors and any holding entities. Full non-recourse is rare in private credit and almost never available to mid-market borrowers. The scope of personal guarantees, whether limited dollar cap versus unlimited, or “all monies” cross-collateralisation versus project-specific, is a key negotiation point and a frequent source of borrower regret if poorly understood.

LVR and LTC ratios

Private lenders generally express leverage two ways: against TDC (loan-to-cost, LTC) and against gross realisation value or GRV (loan-to-value, LVR). Typical bands in 2025 to 2026 may include:

These ranges are indicative; actual leverage is a function of sponsor, location, product, builder and exit. Most private lenders may size to whichever LVR or LTC ratio produces the lower facility, generally meaning the borrower’s equity contribution is the binding constraint.

Typical deal economics in 2025-2026 Australia

The cost structure of an Australian private development facility commonly involves several components, each of which may be modelled together to reach the “real” cost of capital. Figures below are indicative based on 2025 lender disclosures and Stamford Capital survey data; rates and fees move with the cycle and could be confirmed at term-sheet stage.

Interest rates by lender tier

Stamford Capital’s 2025 survey notes margins narrowing by up to 50 basis points over the prior 12 to 18 months, with margins and line fees averaging around 200 basis points for senior product. The May 2025 RBA cash rate cut to 3.85%, with most lenders expecting further cuts over the cycle, has been compressing pricing further.

Fees and structures

• Establishment fees typically run 1.0 to 3.0% of facility limit, capitalised at settlement. Institutional lenders are often at the lower end (1.0 to 1.5%); shorter-term private lenders often at 2.0 to 3.0%.
• Line fees are often nil on a non-bank development facility, with interest typically calculated on the drawn balance only. On bank and stretched-senior facilities, line fees of 0.5 to 1.5% p.a. on undrawn limits are not uncommon.
• Exit or break fees may range from 0% to 1.0% of the original facility; many private lenders waive exit fees for repeat borrowers.
• Capitalised vs serviced interest means most private development facilities capitalise interest into the facility and repay at exit. The borrower has no monthly servicing burden during the build, but the headline LVR and LTC must accommodate the interest reserve.
• Term lengths typically run 12 to 24 months for senior construction facilities, often with one 6-month extension subject to satisfactory performance. Shorter-term private products may be 3 to 18 months.
• Default interest is often quoted at the contracted rate plus a margin uplift of 4 to 6%, occasionally higher on shorter-term products. Default rates apply on covenant breach (LVR, presale shortfall, missed milestones, builder default, sunset breach) and may compound quickly into a refinance crisis.

Total cost of capital comparison

As a rough framework: for a $20 million senior facility at 70% LTC for an 18-month build, a non-bank rate of around 10% p.a. with a 1.5% establishment fee and capitalised interest may typically produce an all-in IRR cost to the project on the order of 11 to 13% p.a. A major bank facility at 7.5% with a 1% establishment fee and a 1% line fee on undrawn portions might produce 8.5 to 9.5% all-in, but only if the developer can meet the bank’s presale and equity hurdles. Where the bank deal is unattainable, the relevant comparison is private finance versus no project at all, in which case the marginal cost of capital is the value of the project margin saved.

Common deal structures

• Senior debt only with first mortgage, sole secured lender, presales as required
• Stretch senior or unitranche as a single facility going higher up the capital stack at blended pricing, common among institutional managers
• Senior plus mezzanine as a two-lender stack with formal intercreditor
• Residual stock loans to refinance completed unsold stock at 55 to 75% LVR
• Presale facility with drawdown against qualifying presale contracts
• Pre-development loans as lower-LVR facilities to fund acquisition pre-DA
• Land bank facilities as term debt against speculative-hold sites

The application process, in practice

Private lender processes vary, but the structure is typical of project finance globally:

Indicative term sheet stage (IM stage). The borrower prepares a high-level Information Memorandum (IM) containing site details, DA status, sponsor track record, builder, feasibility summary, and capital ask. A debt advisor or in-house finance manager could issue this to a curated list of lenders. Indicative term sheets typically come back within 48 hours to two weeks, usually non-binding and subject to credit.

Selection and term sheet acceptance. The borrower selects a preferred lender, accepts the term sheet, and pays a commitment fee or due diligence deposit (typically refundable against establishment fee, $10,000 to $50,000 depending on deal size).

Full credit package. The borrower submits a complete credit package, typically including a full feasibility, cash flow model, contract of sale, fixed-price building contract, builder profile and financial statements, sponsor group personal financials, asset and liability statements, DA conditions and any associated overlay or planning constraint documentation, and an exit strategy.

External diligence. The lender commissions panel valuer, QS, environmental or contamination report (if relevant), legal review, and (for some lenders) iCIRT or builder-specific due diligence.

Credit approval and formal letter of offer. Subject to credit committee. Institutional lenders typically have weekly or fortnightly committees; shorter-term private lenders may approve in a matter of days.

Settlement. Loan documents executed, security registered, settlement effected. Total elapsed time for a well-prepared private development facility may typically run 4 to 8 weeks, versus 12-plus weeks for a typical major bank deal.

Common reasons deals get declined

• Sponsor track record inadequate for the scale of the project
• Developer equity below 20% TDC, or “soft” equity (uplift on land value)
• Project margin below 18% on cost or weak feasibility
• Builder concerns (no fixed-price contract, weak balance sheet, no iCIRT or comparable rating)
• Exit strategy not credible (insufficient sales evidence, no refinance path)
• LVR or GRV ratio outside the lender’s appetite
• Site complexity (heritage, contamination, easements) without a clear mitigation plan
• Planning risk (DA appeals, sunset risk)
• Concentration limits, since many private credit funds will not exceed certain location, builder, or sponsor concentrations within their portfolio

What a strong IM looks like

A strong IM typically opens with a one-page deal summary including the requested facility, term, security, rate expectation, presale position and exit; followed by sponsor profile with completed projects and their outcomes; site and DA detail; feasibility (clean Australian-format model with GST margin scheme treatment); builder and contract; sales evidence and presale strategy; and exit. The single most common IM weakness in the Australian market, frequently cited by debt advisors, is overstated GRV based on outdated or dissimilar comparables. Lenders typically unwind these quickly via the panel valuer, so the IM may be better prepared with conservative-but-defensible numbers.

Risks and red flags for borrowers

Borrowers may benefit from being alert to the following structural and behavioural risks. Many of these are normal features of private development finance, but are amplified at the smaller, less institutional end of the market.

Sunset and long-stop dates

Most private development loans contain hard repayment dates (“long stop”) with limited extension rights. A construction overrun that pushes practical completion past the long stop could trigger default interest, refinance pressure or enforcement.

Default interest rates

A 4 to 6% default margin uplift on top of a 12% headline rate may compound quickly. Borrowers could benefit from modelling worst-case default cost over a 3 to 6 month enforcement window before signing.

Refinance risk if extension needed

Where a project overruns and the lender will not extend, the borrower must typically refinance, often at higher rates and into a market with different appetite. Construction extensions are common; Merricks Capital noted 6 to 18 month delays on projects initiated 2021 to 2023, observing that capitalising interest on delayed projects “significantly erodes equity positions.”

Personal guarantee scope

Limited personal guarantees (capped dollar amount, project-specific) are generally preferable to “all monies” or unlimited guarantees that could cross-default to other facilities. The wording matters and is generally negotiable. Where a debt advisor or specialist lawyer is involved, this is one of the items most reliably improved.

Cross-collateralisation

Some lenders may seek security over a sponsor’s other completed projects or unrelated property. Where unavoidable, the borrower might at minimum negotiate clear release mechanics on each project’s payout.

Predatory shorter-term lender behaviour

ASIC’s Report 814 explicitly identifies the wholesale “sophisticated investor” segment and real estate construction lending as the area of “greatest priority” for regulatory attention. Risk indicators in lender behaviour may include: aggressive establishment fees that are non-refundable on decline, “bait and switch” term-sheet repricing late in the process, opaque borrower-paid fees retained by the manager rather than passed to investors, and aggressive default and enforcement posture.

Mortgage fund versus balance sheet lender distinction

When the lender is a mortgage fund with active redemptions, a borrower could be exposed to indirect liquidity risk. If the fund is hit by investor redemptions, it may be slower to fund drawdowns or may seek early repayment. Balance-sheet lenders typically do not carry this risk in the same form. ASIC’s Report 820, published 5 November 2025, called out that only two of the eight wholesale funds reviewed performed stress testing as part of liquidity risk management.

Why bigger institutional lenders may be safer

ASIC’s REP 814 acknowledges that the institutional end of the market raises fewer concerns because those funds “are already operating in a manner that demonstrates good operating practice, including many of the established practices from the more advanced markets in the US and Europe.” Borrowers may benefit from clearer documentation, more sophisticated workout teams, lower behavioural risk, and capital partners that take a long-cycle view. This may need to be weighed against the typically slower decision velocity at the large institutions.

The post-2022 environment: bank retreat, builder collapses, and institutional growth

Three forces have reshaped the Australian private lender landscape since 2022.

Bank retreat from construction lending

Off the back of APRA’s macroprudential settings and global capital framework reforms, the major banks have materially reduced their construction lending. Bank lending to residential development is reported to have contracted by approximately 10% since the COVID period. The four major banks now compete more selectively for prime, presold deals with experienced sponsors. Stamford Capital’s 2025 survey indicates that 46% of major banks expect to increase CRE construction lending over the year ahead, a sign that bank appetite is selectively returning, but to a higher quality bar.

The builder insolvency wave

ASIC data shows 3,217 construction-firm insolvencies in 2024, up from 2,546 in 2023 and 1,793 in 2022. High-profile collapses have included Probuild (2022), Clough Group (2022), Porter Davis Homes (March 2023), Lloyd Group (2023), Snowdon Developments, ABG Group, Condev, Dyldam, St Hilliers (February 2024), Project Coordination (April 2024) and Roberts Co Victoria (March 2025). Master Builders has characterised this as roughly eight construction firms collapsing daily at peak.

The lender response has been a permanent re-rating of builder risk. Per Stamford Capital’s 2025 survey, 68% of lenders maintain new due diligence processes implemented in response to builder risk, including iCIRT ratings, builder financial statements, project-pipeline visibility, and tighter contingency requirements. The RBA’s October 2025 Financial Stability Review observes that company insolvencies have continued to rise to be “at the top of the range observed in the 2010s,” but with broader spillovers to the financial system limited due to the firms’ limited bank debt and small size.

Institutional private credit growth

As banks pulled back, institutional private credit raised aggressively. MaxCap’s partnership with Apollo, Blackstone’s previous ownership of La Trobe Financial (now Brookfield-owned), CapitaLand’s $200 million acquisition of Wingate, KKR’s launch of an Australian fund attracting $265 million within its first year, and Centuria’s full acquisition of Bass Credit are all indicators. Pallas Capital launched a $500 million PFT2 vehicle. Knight Frank notes domestic institutional managers (MaxCap, Qualitas, MA Financial, Metrics, Merricks) “now provide critical funding with greater flexibility on pre-sales requirements and significantly faster approval timelines.” Bloomberg has reported MaxCap and Pallas explicitly targeting a bigger share of Australia’s approximately $500 billion CRE market.

The combined effect is that in 2025 to 2026, the typical mid-market apartment or townhouse developer’s natural first call may no longer be a major bank, but rather a private credit manager or non-bank lender. Banks remain in the picture for the cleanest deals with the strongest sponsors.

Regulatory landscape

Australian non-bank lenders are not regulated by APRA but sit under ASIC’s oversight, and (where consumer credit applies) under the National Consumer Credit Protection (NCCP) regime via Australian Credit Licences. Wholesale-only commercial property lending generally sits outside NCCP but inside the Corporations Act and AFS licensing framework, with managed investment schemes either registered with ASIC (for retail) or operating under wholesale-investor exemptions (sections 761G and 761GA).

Two ASIC reports in 2025 are essential reading:

REP 814 (22 September 2025) is a commissioned external report on private credit in Australia. Key findings include market size of approximately $200 billion, with CRE roughly half; the institutional end of the market generally well-run; and greater concerns at the wholesale “sophisticated investor” and retail-facing end, particularly real estate construction and development funds. Four key concern areas are identified: conflicts of interest; inconsistent terminology (such as “investment grade” and “senior debt”); valuation and impairment practices; and disclosure variability.

REP 820 (5 November 2025) is based on review of 28 private credit funds (20 retail, 8 wholesale) including Metrics Credit Partners, La Trobe Financial, KKR’s Australian fund, RELI Capital and others. ASIC issued interim DDO stop orders against RELI Capital Mortgage Fund and La Trobe’s US Private Credit Fund and Australian Credit Fund in September 2025. ASIC found “inconsistent practices and, in some cases, material deficiencies” in reporting and terms; interest margin and fee disclosure; governance and conflicts; valuation; and stress testing. Some retail funds had described themselves as suitable for investors with a “low risk tolerance” or for “core” portfolio allocation, characterisations ASIC does not consider accurate for many real estate construction-exposed funds.

ASIC has signalled further work in 2026 including review of adviser distribution of private credit and updates to regulatory guidance for wholesale funds. The Australian Banking Association has separately argued for “a level playing field” between public and private market participants.

For developers, the practical implications may include:

• Lender governance and disclosure quality is becoming a more visible differentiator
• Borrower-paid fees may face increased scrutiny, with increased pressure to be passed through to investors rather than retained by managers
• Some smaller funds may face liquidity stress if redemption pressure rises, with knock-on effects on ability to fund future drawdowns
• The institutional end of the market is operationally better-positioned for the new disclosure environment than the smaller end

Practical guidance: how to approach a private lender

Build a deal package that respects the lender’s process. The IM could answer the questions a lender’s credit committee will ask before they ask them: who is the sponsor, what have they built, what is their equity at risk, what is the project margin, what is the build risk, what is the exit, and what protection does the lender have at every stage.

Approach 4 to 6 lenders, not 20. Carpet-bombing the market dilutes the deal’s perceived quality and signals desperation. A debt advisor will typically curate a target list based on the deal’s profile (size, location, presales position, sponsor track record).

Consider a debt advisor when the deal is large, complex, distressed, or first-time. Debt advisor fees (commonly 0.5 to 1.5% of facility, sometimes paid by lender as origination commission, sometimes by borrower) may typically be justified by improved pricing and terms. For repeat developers with strong existing lender relationships, direct may be the right route.

Negotiate beyond the rate. The negotiation points that may most often deliver real economic value include:

• Establishment fee reduction on repeat business or for large deals
• Limited rather than unlimited personal guarantees, with dollar caps and project-specific scope
• Release mechanics on cross-collateralised security
• Default interest margin (the difference between 4% and 6% over an enforcement period is material)
• Extension rights at term, even one mandatory 3 to 6 month extension with notice, may prevent a refinance scramble
• Drawdown mechanics tied to QS sign-off rather than lender-discretion approval
• Exit fee waiver, particularly where the borrower commits to refinance with the same lender’s residual stock product

Red flags in lender term sheets

• “Subject to satisfactory due diligence in the lender’s absolute discretion” gives the lender unilateral re-pricing or withdrawal rights late in the process
• Establishment fees payable on signing of term sheet rather than at settlement, with no refund mechanism
• Default rate calculations that compound monthly rather than annually
• Cross-default clauses tying the loan to other facilities or sponsor obligations
• Blanket personal guarantees with no cap
• Vague extension provisions that revert to “lender’s discretion”
• Provisions allowing the lender to substitute a different funding entity post-signing (a sign the manager may be shopping the deal across multiple funds)

State-by-state nuances

Australian development finance markets are not uniform across the states. The most notable patterns may include:

New South Wales

The largest market by deal volume and lender concentration. Sydney metro deals dominate large-ticket private credit lending, with deal sizes from $5 million to $200 million-plus routinely funded. Almost all institutional managers are Sydney-headquartered or have a Sydney presence. iCIRT ratings are most widely used here. NSW is the state where presale flexibility is most often available for quality sponsors. Our NSW property guides cover state-specific considerations including stamp duty and planning.

Victoria

The second-largest market and the most volatile from 2022 to 2024 due to concentration of builder collapses (Porter Davis, Lloyd Group, Roberts Co Victoria). Melbourne metro and inner-ring suburban townhouse markets are well-served by mid-market private credit (Centuria Bass, Pallas Capital, MaxCap, Merricks, Wingate). Victorian planning system delays may add execution risk to feasibilities.

Queensland

A growing market with strong appetite from Centuria Bass, Pallas, MaxCap and others. Brisbane infill, Gold Coast and Sunshine Coast are well-served; regional QLD pricing tends to widen 100 to 200 basis points over metro. Deal sizes typically run $3 to $60 million in most non-bank books.

Western Australia

A recovering market following a multi-year downturn. Stamford Capital opened a Perth office in 2025, signalling renewed lender appetite. MaxCap, Centuria Bass and several specialist non-banks lend actively in Perth metro. WA-specific construction sector challenges affect builder due diligence.

South Australia

A smaller market with thinner private lender presence. Adelaide infill and inner-ring townhouse markets are funded primarily by Centuria Bass, MaxCap and a small number of specialist private lenders. Deal sizes typically run $2 to $25 million.

ACT and Tasmania

The smallest markets; most private lenders treat them as opportunistic rather than core. NSW-based lenders extend selectively into ACT (Wingate’s $94 million Soho Precinct Dickson facility for Art Group is a notable example).

Regional Australia

Generally requires a sponsor track record premium and pricing premium. Many institutional lenders cap lending to “metro” or “tier one regional” markets explicitly.

Where private development finance fits in the developer’s toolkit

For a first-time developer at the $2 to $10 million end of the market, private finance is often the only finance available. The realistic feasibility framework may benefit from assuming non-bank pricing, 70 to 80% LTC, capitalised interest, and 30%-plus equity.

For a mid-market developer at $20 to $50 million, the choice between bank and non-bank could depend on presales, time, and sponsor strength. Modelling both options side by side, at indicative pricing, including all fees, capitalised interest and timing, may be the right approach. Where the bank scenario assumes 70% presales achieved within 12 months of marketing launch, and the non-bank scenario assumes 0 to 30% presales with construction starting immediately, the developer is often modelling fundamentally different projects.

For a $100 million-plus developer, the institutional private credit managers (MaxCap, Qualitas, Wingate, Metrics, Merricks, Centuria Bass, MA Financial) typically compete with major bank syndicates. Stretch senior structures, syndicated tranches and offshore-funded mandates become available. Pricing tightens accordingly; large-ticket institutional senior in 2025 to 2026 has commonly been written within 150 to 250 basis points of bank pricing for the strongest sponsors and assets.

The most useful behavioural shift for any developer working with private finance may be to treat capital structuring as a deliberate part of feasibility, modelled, stress-tested and compared, rather than as a transactional procurement at the end of a planning process. Feasly’s funding stack modelling allows developers to test multiple senior, stretch senior and mezzanine combinations against a single feasibility, including capitalised interest and LVR or LTC binding constraints, so that the IM presented to lenders reflects a model the lender’s credit team will recognise as their own.

Frequently asked questions

What is the difference between a private lender and a non-bank lender?

The terms are often used interchangeably in Australia. “Non-bank lender” technically means any lender that is not an Authorised Deposit-taking Institution regulated by APRA. “Private lender” generally refers to non-bank lenders that are not publicly listed or fund themselves through private capital pools (institutional, wholesale or HNW). In practice, almost all private development lenders in Australia are non-banks, but not all non-banks are “private” in the colloquial sense (for example, ASX-listed Liberty Financial is a non-bank but a public company).

How long does a private lender take to settle a development loan?

Indicative term sheets may typically take 48 hours to two weeks. Full credit approval and settlement typically run 4 to 8 weeks for a well-prepared deal, versus 12-plus weeks for a major bank. Shorter-term private lenders may move faster, occasionally settling a bridging loan in days, but at higher cost.

Do private lenders require presales?

It depends on the lender and the deal. Senior bank construction loans typically require 60 to 100% qualifying presales. Non-bank senior facilities frequently accept 30 to 50% or less, and stretch senior or specialist private lenders may accept zero presales with a strong sponsor and exit story.

What LVR will a private lender go to on a development loan?

Senior non-bank construction loans may typically reach 70 to 80% of total development cost, or 65 to 70% of on-completion value (with some up to 75% on quality residential). Stretch senior may extend to 80 to 85% LTC. Pre-DA land loans may sit at 40 to 55% of as-is value.

What rate do private lenders charge for development finance?

Indicative bands in 2025 to 2026 are 8.5 to 11.5% p.a. for institutional non-bank senior, 9.5 to 13% for mid-market non-bank senior, 10.75 to 14% for shorter-term private senior, and 14 to 22%-plus for mezzanine and stretch tranches. Establishment fees typically run 1 to 3%. Total all-in IRR cost on a typical 18-month senior facility may run around 11 to 13% p.a.

Are private lenders regulated in Australia?

Yes, but differently from banks. Private lenders are typically regulated by ASIC under the Corporations Act 2001 and the AFS licensing regime. Where consumer credit applies, they also fall under the NCCP regime via Australian Credit Licences. They are not, however, subject to APRA’s prudential standards in the way that banks (ADIs) are. ASIC has recently increased scrutiny of private credit funds via Reports 814 and 820.

Should I use a debt advisor or approach lenders directly?

For first-time developers, complex or distressed deals, or larger transactions, a debt advisor may typically deliver better outcomes through curated lender targeting, IM preparation and term sheet negotiation. For repeat developers with established lender relationships, direct may be efficient. Debt advisor fees (commonly 0.5 to 1.5% of facility) are sometimes paid by the lender as origination commission rather than the borrower.

What is the biggest mistake developers make with private lenders?

Three common mistakes: overstated GRV in the IM (which the panel valuer typically unwinds quickly); accepting blanket personal guarantees without dollar caps or project-specific scope; and underestimating default interest exposure if the project overruns its long-stop date.

Final thoughts

The Australian private lender market is structurally larger, more institutional and more regulated than at any point in its history. ASIC’s tightening posture, the maturation of institutional managers backed by global capital, the selective return of bank appetite, and the persistent housing supply shortfall all point to private credit retaining a permanent, central place in the development finance stack. For developers, the practical implication is that fluency in this market, including which lenders, what they look for, what they will and will not fund, and how to negotiate with them, is now part of the basic toolkit. A well-prepared sponsor with a credible feasibility, defensible builder, sensible equity contribution and clear exit may find genuinely competitive terms across the lender spectrum, at almost every deal size.

The next stage of any feasibility may benefit from explicit scenario modelling of bank, non-bank senior, and stretch senior options side by side, with all costs (interest, establishment, exit, line, default) and timing reflected. Feasly is built specifically for that work in the Australian context, including GST margin scheme, LTC and LVR binding constraint logic, and side-by-side funding stack scenarios.