Land Banking Finance

Land banking is a deliberate investment strategy: hold well-located development land while waiting for rezoning, DA approval, market conditions, or a stronger equity position before commencing development. The challenge is that standard bank land loans are conservative on LVR and short on term, and many lenders have no appetite for undeveloped land at all. Settled Funding Group arranges land banking finance through specialist bank and non-bank lenders, and for unique scenarios we can introduce you to private finance options.

Who This Is For

• •Investors holding land in growth corridors ahead of rezoning or anticipated infrastructure development that will lift land values
• •Developers assembling multiple lots over time for a larger project, where consolidation is happening in stages rather than all at once
• •Those who have purchased land and are waiting for DA approval or more favourable market conditions before commencing development
• •Investors with a long-term strategy of land appreciation rather than immediate development, seeking to refinance existing land debt into a more structured holding facility
• •Those needing to refinance existing land debt during a holding period where the original loan is expiring or the lender is exiting the exposure
• •Developers managing a portfolio of sites at different stages of the development pipeline, who need a consolidated land holding facility

How Land Banking Finance Works

Land banking finance is typically structured as a short-to-medium term facility against the current value of the land, with the understanding that the borrower's exit is either a development proceeding, a sale of the site, or a refinance when planning approvals improve the fundable value. Because undeveloped land is illiquid as security, lenders assess it more conservatively than DA-approved sites or completed dwellings. Joseph Farhat reviews the land portfolio, the holding strategy, and the exit timeline, then identifies lenders on the 90+ panel who have the appetite for the specific site type and location.

What Lenders Assess for Land Banking Finance

• •Current land value: lenders assess each site on its current unimproved market value, not any projected development uplift or future rezoning value.
• •LVR and holding costs: because undeveloped land is illiquid, LVR caps are tighter than for DA-approved or improved sites. Lenders also assess whether the borrower can service the holding costs during the land banking period.
• •Exit strategy and timeline: the credibility and specificity of the exit plan, whether that is a DA submission, a rezoning timeline, a sale, or a development commencement, directly affects the lender's assessment.
• •Location and planning controls: well-located sites in urban growth corridors with clear planning upside are assessed more generously than rural or speculative sites.
• •Borrower financial position: the overall asset and income position of the borrower needs to support the holding costs for the anticipated duration of the facility.
• •Portfolio composition: for borrowers holding multiple sites, lenders assess the overall concentration of undeveloped land in the portfolio and may apply different LVRs to different sites.

The Land Banking Finance Process: What to Expect

1. 1.Initial review of land portfolio and holding strategy: Joseph Farhat reviews the sites, their locations and zoning, the existing debt position, and the borrower's development timeline and exit plan. This establishes which lenders are appropriate and what LVR is achievable.
2. 2.Application with title documents and financial position: the application is prepared with title documents for each site, existing debt details, income and asset documentation, and a clear description of the holding strategy and exit.
3. 3.Independent valuation of each site: the lender orders valuations of each site in the portfolio on a current market value basis. Sites in the same area may be valued together.
4. 4.Approval: once the lender is satisfied with the site values, the borrower's financial position, and the exit strategy, approval is issued and the facility established.
5. 5.Ongoing management: Settled Funding Group reviews the refinance strategy as development timelines evolve, ensuring the transition from the land banking facility to a development finance facility is managed without gaps.

Indicative Finance Options

Land Banking Finance Broker

Land banking is hard to finance because standard bank land loans are conservative on LVR and short on term, and many lenders have no appetite for undeveloped land at all. Holding well-located land through rezoning, DA, or a market cycle needs a lender comfortable with a longer hold and a clear future development pathway. Appetite, LVR, and term vary widely across the small group of funders who lend in this space. A broker who knows which specialist bank and non-bank lenders fund land banking saves wasted applications, protects your credit file from needless enquiries, and reaches funders most investors cannot approach directly. For complex or longer-hold scenarios, a broker knows where the deal will actually get done.

Settled Funding Group represents you, the investor, not the lender. Joseph Farhat reviews the site, your hold strategy, the future development potential, and your equity position, then matches the situation to the right lender from the 90+ panel and negotiates terms on your behalf. We prepare and manage the submission end to end, and for unique scenarios we can introduce you to private finance options. 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 holding development land, talk to us early and we will tell you honestly what is achievable.