Progress Payment Loans

A progress payment loan is the standard structure for construction finance in Australia. Rather than releasing the full loan amount upfront, the lender draws funds in stages as each phase of the build is completed and inspected. You pay interest only on what has been drawn, which keeps carrying costs low during the construction period. Settled Funding Group arranges progress payment loans across bank and non-bank lenders for owner-occupiers, investors, and owner-builders across the country.

Who This Is For

• •Anyone building under a fixed-price HIA or MBA contract who wants a standard staged construction facility
• •Owner-builders managing staged payments to trades without a single licensed builder contract
• •Developers funding a residential project in stages to control cash flow and interest costs
• •Borrowers who want to pay interest only on drawn funds during the construction period rather than on the full loan from day one
• •Those building where the lender or builder requires progress inspections and formal milestone sign-offs at each stage

How Progress Payment Loans Work

The loan is approved for the full construction amount but drawn down in stages aligned to the build schedule. Each drawdown is triggered by a progress claim from the builder and, in most cases, a formal inspection confirming the completed works. Joseph Farhat reviews your contract, build timeline, and income position, then identifies lenders across the 90+ panel whose drawdown structure and policy fit your specific build. Throughout the construction period, Settled Funding Group coordinates each drawdown with the lender so you and your builder are not chasing paperwork at every stage.

A well-prepared progress payment application moves faster and draws down more smoothly than one that is assembled at the last minute. See the Drummoyne luxury duplex case study for an example of how staged progress drawdowns funded a premium $5M build from slab to completion with a major bank, with each stage managed to keep the project on schedule.

What Lenders Assess for Progress Payment Loans

• •Fixed-price contract: most bank lenders require an HIA or MBA fixed-price contract covering the full scope from slab to practical completion. Non-bank lenders are more flexible on contract type.
• •Builder's licence and insurance: the builder must hold a current contractor licence and adequate construction insurance. Lenders verify both before approving the first drawdown.
• •DA or building approval: planning consent must be in place before a formal approval is issued. Some lenders will provide pre-approval subject to DA.
• •Construction timeline: lenders check that the proposed build schedule is realistic and that the contract completion date sits within the construction loan term.
• •On-completion valuation: an independent valuation of the estimated finished value is the basis for the approved loan amount. A strong on-completion value relative to the loan amount is the key approval driver.
• •Income and serviceability: sufficient to service the loan during the construction period and, where relevant, after practical completion.

The Progress Payment Loan Process: What to Expect

1. 1.Initial assessment: share your builder contract, approved plans, and income position with Settled Funding Group. Joseph Farhat reviews the file, confirms the lenders suited to your build type, and provides an indicative loan amount before anything is formally submitted.
2. 2.Application prepared with the fixed-price contract, DA, plans, builder details, and income documents.
3. 3.Lender commissions an independent on-completion valuation. This is the figure the approval is structured around.
4. 4.Approval and loan documents issued, typically one to three weeks from submission. The first drawdown is released at slab completion.
5. 5.Subsequent drawdowns at frame, lockup, fixing, and practical completion. Each drawdown requires a progress claim from the builder and, in most cases, an inspection. Settled Funding Group manages each drawdown request with the lender throughout the build.

Indicative Finance Options

Progress Payment Loan Broker

Progress payment lending varies more between lenders than most borrowers expect. Each lender structures its drawdown schedule differently, applies its own rules on how each stage is verified and released, and has a different appetite for build type, contract structure, and borrower profile. A delay in releasing a progress payment can stall a build and strain the relationship with the builder. Applying to lenders whose drawdown policy does not suit your contract wastes time and adds avoidable credit enquiries. A broker who knows how each lender handles staged drawdowns goes straight to those whose process fits your build, including non-bank and specialist funders many borrowers cannot approach directly.

Settled Funding Group represents you, the borrower, not the lender. Joseph Farhat reviews your contract, your build stages, and your income position, then matches the scenario to the right lender from our 90+ panel and negotiates terms on your behalf. For unique scenarios, we can introduce you to private finance options. We prepare and manage the application end to end, and help keep your progress drawdowns moving on schedule. As a broker, we are typically paid by the lender on settlement, so in most cases there is no direct cost to you. If you need progress payment finance set up cleanly, talk to us early and we will tell you honestly what is achievable.