MFEG Property Development Finance

Property development finance is used to finance the construction, conversion or heavy refurbishment of buildings, either residential or commercial. It is usually a short-term loan to fund the build part of the project only.

At MFEG, we’re committed to supporting quality property developers in getting their projects out of the ground efficiently, with tailored funding solutions that work. We’ve created a streamlined process for structuring solutions through our network of investors and wholesale funders. These solutions are designed to suit your individual project and group’s needs.

MFEG’s flexible property development funding model and great relationships with other industry professionals enable us to support our clients through the project journey – from land purchase through to completion.

Our team has established an enviable track record in originating and arranging funding solutions for many property development projects, including:

• Residential units and townhouses
• Land subdivisions
• Commercial (retail, industrial, office)
• Specialised projects (eg. childcare centres, medical, hotels)

Ground-up property development finance is for large projects and covers the cost of the land and most of the construction costs, around 70% - 80% of the build cost. The developer must source the remaining funding for the project.

The term ‘property finance’ is a very broad term that can include bridging loans, commercial mortgages and development finance. The specificity of property development finance focuses on what the money is to be used for.

If approved, a lender can provide finance for most of the development, for example, 60% of the purchase of a property and 100% of the building costs.

This means the developer has a smaller commitment in up-front fees, freeing up cash for any unexpected costs along the way.

Development finance is far more affordable than other options in the long term. Interest is only charged on any funds released. If there are different stages in a project, the funds are only released per stage, and hence, less interest is paid for the whole journey.

MFEG has the capacity to arrange funding for property development from $ 500K up to $200M. The amount of money you can borrow is dependent on many factors, such as the value of the project, what the build costs will be and the terms of the lender involved.

While there can be changes in the amount depending on the lender, the type of project and other conditions, typically, you would be looking at 20% of the project's total cost, including the price of land. There can be a difference in the percentage depending on whether it is a commercial or residential project.