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Navigating Development Finance: Turning Visions into Reality

In the world of property development, turning a blueprint into a reality requires more than just a vision – it requires a solid financial foundation.

Development finance, also known as commercial finance, serves as the cornerstone for building spec homes and undertaking various development projects. Let's delve into the realm of development finance and shed light on how to navigate this dynamic landscape.

Understanding Development Finance

Development finance is the lifeline that breathes life into construction projects, enabling developers to transform vacant land or underutilized properties into thriving assets. These projects are often executed under the banner of a company or a trust, with each endeavor being approached as a unique project. In the current lending landscape in New Zealand, securing funding from traditional banks for development projects can be challenging. Banks exhibit a degree of caution in this area due to the inherent risks associated with development ventures. Consequently, a significant portion of development financing, approximately 95%, is channeled through non-bank lenders.

Flexible Terms and Conditions

Non-bank lenders bring a unique flavor to development finance, offering flexibility that traditional banks often lack. Interest rates, terms, and conditions vary across these lenders, driven by their risk appetite and market trends. While interest rates may be slightly higher than those offered by traditional banks, this differential is a reflection of the agility and versatility that non-bank lenders bring to the table.

Navigating Unsold Properties and Challenges

One notable advantage of non-bank lenders is their willingness to work with properties that haven't yet found buyers. Traditional banks tend to shy away from such scenarios, but non-bank lenders often demonstrate a greater degree of flexibility, enabling developers to navigate challenges more effectively.

Access to a Diverse Lender Pool

At NZ Mortgages, we're connected to a network of over 25 non-bank lenders, ranging from private funders to larger non-bank entities. This expansive lender pool offers a diverse range of financial solutions tailored to different development scenarios. Our expertise extends from assisting individual builders embarking on one-off spec home projects to supporting developers engaged in ambitious 100-section subdivisions.

Whether you're eyeing a modest development venture or a large-scale subdivision, we have the knowledge and connections to guide you through the financing process. We're committed to bringing your development vision to life. Connect with us to explore financing options that align with your project's unique requirements.