Factory Construction Finance

For manufacturers, industrial operators, and investors building factory premises, the choice between owner-occupied and investment factory finance determines which lenders and which structures are available. Owner-occupied factory construction is assessed against the business financials and the property value. Investment factory development is assessed on yield, tenant covenant, and GRV. Both require industrial zoning and a DA, and both benefit from a broker who understands the difference between residential construction lenders and the commercial and industrial lenders who actually fund factory builds. Settled Funding Group works with business owners and investors to identify the right lender from the 90+ panel. Joseph Farhat manages the application from initial review through to construction drawdowns and long-term refinance.

Who This Is For

• •Manufacturers and industrial operators building a purpose-built factory for their own operations to stop paying rent and own their premises.
• •Investors building a factory for lease to an industrial tenant in a well-located industrial corridor.
• •Those building a multi-unit factory complex for strata sale, where individual units are sold to owner-occupiers or investors on completion.
• •Developers building light manufacturing or production facilities in established or emerging industrial estates.
• •Business owners in growth industrial corridors who want to build premises that match their operational requirements precisely.
• •Those building a factory in a location with strong industrial demand and limited existing supply, where the investment case is supported by low vacancy and rental growth.

How Factory Construction Finance Works

Factory construction finance is a staged facility released in drawdowns as the build progresses. For owner-occupied factory builds, the assessment centres on the business financials of the occupying entity and the property value as security. For investment factory development, the assessment focuses on the pre-lease position, tenant covenant, projected rental yield, and GRV. Multi-unit factory complexes for strata sale are assessed on the per-unit GRV and presales position. Joseph Farhat reviews the purpose, zoning, and build cost and identifies lenders from the panel whose policy fits the specific structure of the project, whether that is a major bank for a straightforward owner-occupied build or a non-bank lender for a spec or investment development.

What Lenders Assess for Factory Construction Finance

• •Purpose: owner-occupied or investment. Owner-occupied factory finance is assessed primarily on the business financials of the operating entity and the property value. Investment factory development is assessed on yield, tenant covenant, and GRV.
• •Industrial zoning and DA: the site must be zoned for industrial use and the DA must permit the proposed factory use. Employment or light industrial zones are acceptable; residential or commercial zones are not.
• •Build cost and GRV: the total construction cost and the gross realisation value on completion. For strata complexes, GRV is assessed on a per-unit basis with deductions for selling costs.
• •Tenant covenant (if pre-leased): for investment factory builds, a signed lease or heads of agreement with an experienced industrial tenant is a significant strength. The tenant's financial standing and the lease term are assessed.
• •Business financials (owner-occupied): two years of tax returns and business financial statements are required for owner-occupied factory construction under major bank lending. Non-bank lenders accept alternative documentation for self-employed borrowers.
• •Builder contract: a fixed-price contract with a licensed commercial builder is required. Cost-plus or open-book contracts are not accepted by most lenders without additional risk mitigants.
• •Exit strategy: owner-occupied factories exit to a long-term commercial mortgage. Investment factory development exits via individual strata sales or long-term commercial investment refinance against the lease income.

The Factory Construction Finance Process: What to Expect

1. 1.Initial review: Joseph Farhat reviews the purpose (owner-occupied or investment), industrial zoning, build cost, and income or business financials to identify the right lender before submission.
2. 2.Application prepared and submitted with the DA, builder contract, QS report or cost breakdown, and income documents or business financials.
3. 3.Independent valuation: a commercial valuer assesses the GRV and the as-improved value of the factory on completion.
4. 4.Approval: typically two to three weeks from submission for straightforward owner-occupied builds. Investment and strata factory developments may take three to five weeks depending on lender and project complexity.
5. 5.Staged construction drawdowns released at milestones. At practical completion, the factory is handed over for owner-occupation or the lease commences, and the exit to long-term commercial refinance is arranged.

Indicative Finance Options

Factory Construction Finance Broker

Factory construction is assessed by commercial and industrial lenders, not residential construction lenders, and the structure depends entirely on whether the build is owner-occupied or investment. Owner-occupied factory finance is assessed against business financials and property value; investment factory development is assessed on yield, tenant covenant, and GRV. Appetite, LVR, and policy on industrial zoning vary widely between funders. A broker who understands the difference and knows which lenders actually fund factory builds saves wasted applications, protects your credit file from needless enquiries, and reaches non-bank and specialist commercial funders most business owners cannot approach directly. For complex or time-critical builds, a broker knows where the deal will actually get done.

Settled Funding Group represents you, the business owner or investor, not the lender. Joseph Farhat reviews whether the project is owner-occupied or investment, the zoning, the DA, and your financial position, then matches the project to the right commercial or industrial lender from the 90+ panel and negotiates terms on your behalf. We manage the application from initial review through construction drawdowns to long-term refinance. 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 are building factory premises, talk to us early and we will tell you honestly what is achievable.