Private Development Finance

Private development finance sits outside the standard bank and non-bank lending market. It comes from private credit funds, family offices, and high-net-worth investors who can move faster and apply more flexible criteria than regulated lenders. The cost of capital is higher, and the scenarios where it is appropriate are specific. This page is an educational overview of what private development finance is, when it is typically considered, and what Settled Funding Group can do for borrowers in unique situations where mainstream options have been exhausted.

Who This Is For

Private development finance is typically considered when:

• •The development falls outside bank and non-bank policy due to its structure, location, or complexity.
• •The developer needs faster approval than a bank or non-bank can provide and the timeline is critical.
• •A project has stalled mid-construction and needs emergency capital to fund completion.
• •The development involves a complex ownership or trust structure that mainstream lenders will not touch.
• •The developer has a strong project but a limited track record that excludes them from bank and non-bank criteria.
• •The exit is clear, such as pre-sales or refinance, but the entry conditions are unusual or distressed.

How Private Development Finance Works

Private development finance comes from private credit funds, family offices, and high-net-worth investors rather than regulated banks or non-bank lenders. Because the capital is private, these lenders can move faster and apply more flexible criteria. The cost of capital is higher, reflecting the flexibility and speed on offer. Private development facilities are typically interest-only, short-term (6 to 24 months), and secured by first or second mortgage over the development site. They are best suited to scenarios where speed, flexibility, or complexity is the primary driver and where a clear exit strategy is in place.

A real example of private finance playing a role in a development scenario can be found in the Five Dock duplex rescue case study. Private finance was used to rescue a stalled development and fund completion when mainstream options could not move quickly enough. It illustrates the kind of unique scenario where a private finance introduction may be appropriate.

What Private Development Lenders Assess

• •Equity position: the developer's equity in the site and the overall project, including any existing debt sitting over the security.
• •GRV and LTC: gross realisation value of the completed development and the loan-to-cost ratio against total development costs.
• •Development stage and cost to complete: the stage the project has reached and the remaining cost to reach practical completion.
• •Exit strategy: whether the exit is via pre-sales, refinance to a long-term facility, or sale of the completed project. A clear and credible exit is the most important factor for private lenders.
• •Developer credibility and experience: the developer's track record and ability to manage the project to completion, even where formal income documentation requirements are lower.

SFG's Role: Introduction Only

For borrowers in unique scenarios where bank and non-bank development finance options have been exhausted, Settled Funding Group can make an introduction to private finance specialists. Joseph Farhat reviews the position, identifies whether an introduction is appropriate, and facilitates the connection. The private lender then conducts its own independent assessment. SFG's role in relation to private lending is introduction only, not credit assistance. This is an important distinction.

The Process: What to Expect

1. 1.Initial review: Joseph Farhat reviews the project, the reason bank and non-bank channels are not the right fit, and whether the scenario is appropriate for a private finance introduction.
2. 2.If an introduction is appropriate, Joseph facilitates contact with private finance specialists. The private lender then conducts its own assessment independent of SFG.
3. 3.The private lender reviews the equity position, GRV, LTC, stage of construction, exit strategy, and developer credibility. Income documentation requirements are typically lower than bank or non-bank.
4. 4.If the private lender proceeds, they issue their own terms and manage the facility directly. SFG's involvement ends at introduction.
5. 5.For borrowers who do qualify for non-bank development finance (the first option for most complex scenarios), SFG manages the full application and drawdown process on the 90+ lender panel.

Indicative Finance Options

Private Development Finance Broker

Development finance sits across a fragmented market of bank and non-bank lenders, each with different appetites for presales, loan-to-cost, gross realisation value, asset type, and developer experience. A project one lender declines is often funded by another. For most developments, a bank or non-bank facility is the right fit, and a broker who knows which of those lenders actually fund your project type saves you weeks of wasted applications and protects your credit file from unnecessary enquiries. For genuinely unique scenarios that fall outside bank and non-bank policy, there are private finance options worth exploring, and knowing where to look matters.

Settled Funding Group represents you, the developer, not the lender. Joseph Farhat reviews your feasibility, planning status, presales position, and exit, then matches the project to the right bank or non-bank lender from our 90+ panel and negotiates terms on your behalf. For unique scenarios where bank and non-bank lenders are not the right fit, we can introduce you to private finance options. Our role with private finance is an introduction only, not credit assistance, and the private financier deals with you directly. As a broker, we are typically paid by the lender on bank and non-bank settlements, so in most cases there is no direct cost to you. If your project is complex or time-critical, talk to us early and we will tell you honestly what is achievable.